Energy: Tidal Generation
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	Question

Lord Renton of Mount Harry: To ask Her Majesty's Government what action they are taking to exploit further the United Kingdom's natural resources of tidal power.

Baroness Stowell of Beeston: My Lords, it is important that we exploit our tidal resources to provide energy security, carbon reduction and economic growth. However, it must be done in a manner that constitutes value for money. The Government do not see a strategic economic case for public investment in a tidal barrage in the Severn at the present time, given its very large costs. Instead, our focus is on developing tidal stream and wave technologies. The UK is already a global leader in this emerging sector.

Lord Renton of Mount Harry: I hope I am allowed to say that I found that a very helpful Answer. Will my noble friend suggest to the Department of Energy that it should create something like a United Kingdom tidal energy enterprise that will manage the growth of tidal power? We have been slow to start and there are now a great many players in the field. Does she agree that it is essential to see that all the eventual profit goes not into the pockets of the large electricity companies but into ensuring that there is cheap, available electricity that will save costs for thousands of homes?

Baroness Stowell of Beeston: My Lords, my noble friend is absolutely right about the importance of our tides and the opportunity that they provide in supplying renewable energy. I will of course take back his specific proposal to the department. Perhaps it is worth adding to my previous Answer. The department has not ruled out completely the possibility of a Severn barrage and will consider privately funded projects on their merits. Indeed, the department is currently reviewing a business case from a private consortium.

Baroness Whitaker: My Lords, I have another proposal for the Minister. The coasts of Britain have enormous potential to provide this reliable energy permanently. Will she give consideration to restoring the tide mill at Newhaven in Sussex which, under the Duke of Newcastle in the 19th century, was the largest mill in the country? It could be an educational example of how this power works.

Baroness Stowell of Beeston: I thank the noble Baroness for that recommendation. I am not familiar with the mill. The department is concentrating its efforts on new technologies associated with tidal stream and wave energy. Certainly in that area much is happening in the industry to progress the innovation that is happening already in this country-we are a global leader. I will consult the department on the idea that the noble Baroness put forward and come back to her as soon as I can.

Lord Walpole: My Lords, will the Minister comment on what is happening at Scapa Flow in Orkney? Things were definitely looking rather exciting about two years ago. Is there any progress?

Baroness Stowell of Beeston: I did not catch the name of the place.

Lord Walpole: Scapa Flow, in Orkney.

Baroness Stowell of Beeston: I am not sure that that helps me very much. Certainly there is a lot happening in Orkney as part of the tidal stream and new technology. The example that the noble Lord has identified may be part of the new innovation that is taking place right there, but I am afraid that I do not have any specific details on that.

Lord Teverson: My Lords, the Government have a very modest target of 300 megawatts of capacity of tidal and wave power by 2020, but how are they going to make sure that there is a balance between the environmental effects of this tidal stream and the renewable energy targets? How are the Government making sure that we sing from the same hymn sheet with the Marine Management Organisation, particularly with the allocation of marine conservation zones? How are we going to stop that conflict and still meet the targets?

Baroness Stowell of Beeston: As part of the UK marine energy programme, the department is working with the Marine Management Organisation and Marine Scotland to establish a working group to consider the approach to planning and consenting for wave and tidal energy. I hope that that will address the concerns that my noble friend has raised.

Baroness Smith of Basildon: My Lords, the Minister has been very helpful and thorough in her answers to questions today. One of the things that she said at the beginning is that there will be no public investment in tidal power. If we are to exploit this natural resource, private investors will need to have confidence in the Government's commitment to renewables. Today in Westminster, hundreds of people, including investors, are lobbying and campaigning against the Government's changes to feed-in tariffs on solar power which will decimate the solar industry. What action does the Minister think that the Government can now take to reassure investors that they are committed to renewable energy? Unless urgent action is taken, the Government will have failed in their promise to be the greenest Government ever.

Baroness Stowell of Beeston: This Government are absolutely committed to being the greenest Government ever. On the solar feed-in tariffs that the noble Baroness mentioned, the changes that the Government introduced are precisely to ensure that that industry is sustainable and exists into the future. As to tidal stream and what the department is doing to work with the industry, it has put forward innovation funding of £20 million and it is working closely through the UK marine energy programme, which is chaired by the Minister, Greg Barker, and includes representatives of the technology developers, the utilities, the large industrial organisations and financiers. The Government are committed to supporting this new and emerging industry.

Lord Forsyth of Drumlean: My Lords, would it not be fairer for the consumers of electricity in this country if the costs of these schemes, including the solar power and tidal schemes, were clearly put on their bills so that people would know how much extra they were paying for them? They are subsidised by the consumers. Therefore, this is a subsidy for wealthy people from poor people who are struggling to pay for their energy costs.

Baroness Stowell of Beeston: I share my noble friend's concerns about people subsidising others in the way that he has described. If the Government did nothing on the feed-in tariffs for solar power panels, the equivalent of around £9.50 would be added to the average domestic bill. By introducing the changes that we are proposing, that would be reduced by 2014 to around £2.50 or £3. As to his specific proposal of identifying these costs on bills, I will certainly explore that idea with noble friends at the Ministry.

Baroness Farrington of Ribbleton: There have been complaints from the industries affected by the Government's change of policy on solar power. How can this reassure private investors in tidal and wave power when the Government appear not to listen to the industry having made commitments?

Baroness Stowell of Beeston: This Government are learning from the previous Government's initiatives by making sure that what we introduce in terms of new subsidies will avoid the need to change the arrangements at a later date and will therefore provide the certainty that the industry looks for.

Climate Change: Durban Conference
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	Question

Lord Judd: To ask Her Majesty's Government what are their priorities for the outcome of the Durban climate change conference starting on 28 November, and what steps they have taken to ensure maximum possible global ownership of the agenda.

Baroness Stowell of Beeston: My Lords, the Government remain committed to keeping the global temperature rise below 2 degrees above pre-industrial levels. Therefore, at Durban, the Government's priority is to make further progress towards an ambitious, legally binding agreement for all countries to reduce emissions. To ensure a truly global approach in these negotiations, we have been working closely with other developed and developing countries within the EU, the UNFCCC and other fora.

Lord Judd: Is it not essential that at this critical juncture we do not lose momentum? If we are to sustain momentum, is it not also essential that the agenda, not just the matters being discussed, reflect the perceptions and needs of the developing countries, and that without that shared ownership we will be in difficulties making progress? Is the green climate fund not critical to all this? How soon can we expect to see it operational with women and the poorest central to its concerns?

Baroness Stowell of Beeston: My Lords, I refer to the letter by the Secretary of State in today's Guardianbecause he clearly spells out the Government's aim at Durban this year. He said:
	"The UK would like to see a global treaty signed straight away but the reality is that some of the biggest economies, both developed and developing, are not yet ready. We aim at Durban to reach agreement on the need for a new treaty and to set out a timetable for its negotiation, concluding no later than 2015".
	Developing countries are essential to hitting that target and many of those countries are affected by climate change. In the negotiating process, the relationship between rich and poor countries has sometimes been out of kilter and there has been an imbalance, which is why the Government have taken two specific actions to address this. First, the advocacy fund, which was launched by Andrew Mitchell in September, provides support and training to negotiators from those countries. Secondly, the UK is very active in the Cartagena dialogue.

Lord Lawson of Blaby: My Lords, will my noble friend confirm that in the absence of an agreement at Durban of the kind that she described, Her Majesty's Government will suspend all their unilateral decarbonisation targets post-2020, which damage our competitiveness and threaten our economic recovery to no conceivable purpose?

Baroness Stowell of Beeston: It is a great privilege to be asked a question by my noble friend. I would like one day to be able to provide an answer that will not disappoint him, but I think that on this occasion I will have to. The Government are very committed to achieving the targets that I have already outlined and want to show leadership in this area. The Government are not signing up immediately to Kyoto 2 and want to make sure that before they commit to that, all countries are signed up to and agree to the need for the 2-degree target.

Lord Prescott: My Lords, the Minister may well be aware that I have tried to convince this Government that the negotiations for Kyoto 2 will not be completed at the end of Kyoto 1 in 2012. In those circumstances, is she prepared to support the European principle of "stop the clock" when negotiations have failed to meet the timetable and not join with the rich countries, as was almost suggested by the previous speaker, which want to destroy Kyoto, which is not acceptable?

Baroness Stowell of Beeston: The noble Lord is far more experienced in negotiating climate treaties than I am. On his specific question, I have to limit my answer to restating the fact that there are two separate things going on here: Kyoto 2 and a globally binding treaty by 2015. The Government are absolutely committed to the latter. We would be willing to sign up to the former but will not do that until everybody agrees that they will sign up to that 2-degree climate change.

Lord Teverson: My Lords, almost certainly there will not be a comprehensive agreement at Durban. That comes as a surprise to no one. However, there was good progress by the RED initiative around stopping deforestation, particularly in underdeveloped countries. Can my noble friend the Minister assure me that the UK Government will particularly press for an agreement on the RED initiative so that we can stop this major source of emissions and the loss of forest worldwide?

Baroness Stowell of Beeston: I am sure that the Government are working on that, and I am grateful to my noble friend for raising the issue. If there is anything specific that I can offer further to my answers today, I will obviously provide it to him.

Baroness Worthington: My Lords, although the UN process remains blocked by the lack of US participation, will the Minister tell us more about the Clean Energy Ministerial meeting to be held in London next year? Energy Ministers from around the world will be gathering here, and they could potentially sign up to a deal that agrees to reduce the carbon intensity of our energy as soon as possible. This would be a very clear step forward while the UN process remains bogged down by the lack of US participation.

Baroness Stowell of Beeston: I am amazed at the expertise that is coming at me today from different parts of the Chamber. The noble Baroness knows far more about the detail of these issues than I do. On the conference next year that she refers to, our objective is to complete concrete outcomes that demonstrate progress and enhance global low-carbon energy technology development internationally.

EU: Integration
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	Question

Lord Pearson of Rannoch: To ask Her Majesty's Government whether they continue to support European integration.

Lord Howell of Guildford: My Lords, my right honourable friend the Prime Minister has described the present situation as,
	"an opportunity to begin to refashion the EU so it better serves this nation's interests".
	We want to see a European Union, in his words,
	"with the flexibility of a network, not the rigidity of a bloc".
	The future shape of the EU might well involve more integration in some areas and between some countries, and less in others. Of course, the Government have also made it clear that they wish to see no treaty changes that transfer power or competencies from the UK to the EU in this Parliament.

Lord Pearson of Rannoch: My Lords, I am grateful to the noble Lord. However, the British people have seen through the fiction that the European Union guarantees peace and safeguards jobs. So I have to press the Government: what is it really for? Put slightly differently, I suppose we can all agree that other international bodies such as the United Nations or NATO have an identifiable purpose, but can the Government tell us why we need the European Union at all, not to mention its very own disastrous euro?

Lord Howell of Guildford: I think the British people have a sensible and balanced appreciation of the virtues of living in the European continental area: that it is a mighty single market; that our influence in it is useful; and that when it comes to trade bargaining with the rising powers of Asia, Latin America and Africa, it is very useful to have a bit of muscle. That is a perfectly sensible and common-sense view that, I suspect, prevails in the minds of most of the British people. They may not like some of the aspects of the EU-many of us find these things irritating-but on the whole it seems a reasonable grouping in which to be deeply and actively involved, and that is where we stand.

Lord Tomlinson: My Lords, would the noble Lord agree with me that the only alternative to the word "integration" used in the Question is disintegration or stagnation, and that our future lies in an integrated Europe-within the confines of some of the qualifications that he made-and that any question of encouraging disintegration would be wrong?

Lord Howell of Guildford: To avoid the debate getting too polarised, of course, there are degrees of integration. In this decentralised age, compared with the 20th century, where centralisation and central state dominance were the fashion, people are looking for more flexibility and decentralisation in all sensibly run organisations, including the EU. There may be some areas, as I indicated in my opening Answer, where a degree of integration is more sensible as an alternative to chaos. However, there may be many other areas where the time has come for decentralisation and a returning of powers closer to the people.

The Marquess of Lothian: My Lords, how would the Minister define a European Union that is more of a network than a bloc?

Lord Howell of Guildford: My noble friend is asking for an answer that would take longer than the patience of the House of Lords could tolerate. The simple answer is that a bloc tends to be a congealed and sometimes compelled form of integration under tight central control, while a network is a much more modern, less fragile and less rigid structure in which exchanges of views and dialogues in addressing new issues can constantly be adjusted in the light of changing circumstances.

Lord Anderson of Swansea: My Lords, do not the ambitions set out by the Minister depend essentially on the concurrence of our partners? What expectation does he have that that will be forthcoming? Is it not a fact that as a result of the economic and financial crisis, there will be strong pressures for more integration in certain sectors? We as a Government and as a country have a choice, either arrogantly to rail against them from outside, or to be part of them and seek to bow them in a way that we want, including on principles of subsidiarity and proportionality.

Lord Howell of Guildford: Some of those aspects are correct, but the noble Lord overemphasises the polarity and the rigidity of the choice. There is no doubt that one of the propositions that is current throughout the eurozone is that the only way forward is towards fiscal union. Indeed, if that is a way of avoiding total chaos in the European markets, it is in our interest, too, that the process should be non-chaotic. That is perfectly clear. However, in other areas, as I said earlier, some degree of decentralisation and flexibility might play a much more useful part in making the European Union fit for purpose in the 21st century.

Baroness Falkner of Margravine: Would it help my noble friend, in answer to the question of the noble Marquess, Lord Lothian, if the networked Europe that he talked about was a flexible EU of variable geometry, in which those that want to join the eurozone can do so, and those that want to deepen the single market for a more competitive open trading system to the benefit of all our citizens can also participate in the decision-making? Should that not be the way forward, not fretting about variable speeds and referendums?

Lord Howell of Guildford: I do not know about my noble friend's remarks on referenda. There is a case for them on certain occasions, as the Government have made clear. However, the broader issue she described is not very different from what we had in the past. This nation and several others are not members of the eurozone; others are. There is absolutely no reason why we should not co-operate very closely with those who are in or out of the zone in what is in effect a multi-speed Europe, as long as we recognise that we work together in a co-operative pattern within the Union to address constructively the very dangerous challenges from the outside world.

Baroness Royall of Blaisdon: My Lords, would the Minister agree that there are dangers with a two-speed Europe, and that if a inner eurozone were to be created, it would be in the interests of the United Kingdom to be present at all discussions that took place within that eurozone, even if we were not at the table?

Lord Howell of Guildford: Again, I do not necessarily believe that it would be a sort of inner and outer pattern or that the inner zone would necessarily move at a faster speed than the outer. After all, as someone pointed out to me, if you want to get around Paris you go on the Périphérique and not through the middle. So it may not be quite like that, but obviously we want to be closely involved in the evolution of the European Union and its refashioning, to quote my right honourable friend the Prime Minister, and we certainly will be. One of the things we should discuss together, not just bilaterally between London and Brussels but in the interests of the whole Union, is a more balanced approach as to the powers and competences between the nation states and essential EU authorities. That, I gather, is also the policy of the Labour Party.

NHS: Waiting Times
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	Question

Lord Beecham: To ask Her Majesty's Government how many patients currently waiting more than 18 weeks for treatment will benefit from the recent directive on waiting times; and what are the most common conditions from which they suffer.

Earl Howe: My Lords, we have introduced a strong performance measure in 2012-13 for patients still waiting to start treatment more than 18 weeks after referral. This, and the requirement to treat patients in order of clinical priority, will ensure that the NHS focuses on minimising waiting times for all patients. At the end of September 2011, 242,540 patients were waiting longer than 18 weeks to start treatment. The largest numbers of patients were waiting in trauma and orthopaedics specialties.

Lord Beecham: My Lords, does not this U-turn underline the folly of abandoning targets in the first place? Will the Minister say how, under the provisions of the Health and Social Care Bill, the Secretary of State will be able to intervene in similar circumstances should they arise in future?

Earl Howe: My Lords, this is not a U-turn. The Government have always been clear that the standards laid down in the NHS constitution should be adhered to. As the noble Lord will know, that includes the expectation that patients should not wait for longer than 18 weeks. It is also a condition built into the NHS standard contract. We have been absolutely consistent all the way along. Those things will continue to have to be measured after the Government's modernisation proposals are put in place.

Baroness Finlay of Llandaff: What percentage of patients in hospital are currently awaiting discharge because of delays in establishing a suitable care and follow-up package for them at home, thereby preventing the admission of others for investigation and treatment?

Earl Howe: My Lords, in the first quarter of the current financial year, 0.4 per cent of occupied bed days were taken by patients who were delayed while waiting for a care package. That picture has deteriorated over the past year but that deterioration masks some variations. Some hospitals have improved dramatically and others have started reporting for the first time. It is not possible to compare this year's figures with the previous year, although these are very important figures which we do monitor.

Lord Naseby: My Lords-

Baroness Jolly: My Lords-

Lord Naseby: My Lords, is it not strange that the figures show that certain hospitals consistently get nowhere near meeting the 18-week target? What action are the Government going to take to help those hospitals ensure that they perform like the average?

Earl Howe: Yes, my Lords, my noble friend is right. Five hospitals account for a very significant proportion of the number of patients waiting for longer than 18 weeks. We are working with those hospitals to look at ways in which that performance can be improved. We know that it can be because many hospitals are more than achieving the desired standard.

Lord Warner: My Lords-

Baroness Jolly: My Lords-

Lord Clark of Windermere: My Lords-

Lord Strathclyde: Perhaps we may hear from one noble Lord from the other side at a time, and then from my noble friend.

Lord Warner: I am grateful to the noble Lord. Blessed is the sinner who repents. However, will the Minister tell us whether in the light of this repentance, he will, following my noble friend Lord Beecham's Question, look sympathetically at amendments to the Health and Social Care Bill which will give patients the kind of safeguards that targets did under the previous Government?

Earl Howe: My Lords, we believe that the safeguards are already in place, but the figure I cited in my original Answer is very similar to the figure we have seen over the past two and a half years. Little progress has been made over that time. We do not think that that is satisfactory, so we are broadening the operational standard to ensure that more patients are treated in a timely way. I am sure all noble Lords would wish to see that.

Baroness Jolly: My Lords, approaching 250,000 patients have been waiting for more than 18 weeks and I expect that they would like to know why, as would the House. Can the Minister give us any indication, apart from the five hospitals mentioned earlier, of whether there is a regional pattern to this-while we still have regions-or of whether it is the result of financial pressures, clinical management issues or maybe a combination of all three?

Earl Howe: It does seem to be a combination of all three, although it is clear that in certain areas there is a shortage of the necessary specialist consultants. Sir Bruce Keogh, the NHS medical director, is addressing this urgently with the British Orthopaedic Association in particular. That is expected to result in a solutions paper being put to the NHS Operations Executive in the new year.

Baroness Thornton: My Lords, this weekend the Royal College of Nursing reported that around 50,000 nursing posts are either in jeopardy or lost completely due to the ill conceived implementation of the economies being driven through the NHS. Does the noble Earl accept this figure and what effect does he think that figure might have on waiting times and waiting lists? Is it not time for the Government to accept that cuts to front-line staff are going to have an effect on patient care?

Earl Howe: My Lords, in that press release, which I think was from the Royal College of Nursing, there was a blurring of the distinction between the number of nursing posts which have been lost and the number which might, if certain things happen in the future, be lost. We recognise that in some cases local organisations will have to make difficult choices about staffing changes in the coming years. In making any changes, we have been clear that we expect them to ensure that the quality and safety of care is maintained or improved. That may involve changing the skill mix of the workforce in a particular hospital but, if that happens, it has to be safety and quality assured so that there is no adverse effect on patients.

Health and Social Care Bill

Main Bill page
	19th Report from the Delegated Powers Committee
	18th Report from the Constitution Committee

Committee (7th Day)

Relevant documents: 19th report from the Delegated Powers Committee, 18th report from the Constitution Committee.
	Clause 20 : The NHS Commissioning Board: further provision
	Amendment 96
	 Moved by Lord Warner
	96: Clause 20, page 15, line 37, leave out first "the" and insert "a maximum of five obligatory and five desirable"

Lord Warner: My Lords, we have come to Clause 20, which covers the Secretary of State's mandate to the National Commissioning Board and the wide range of duties placed on the board. This gives us an opportunity to probe the Government's intention vis-à-vis this board and their perspective on the relationship between the board and the Secretary of State. I find myself taking something of an ambivalent attitude to the board which, if I may say to the Minister, was a major reason for my being very unattracted to the idea of chairing it when I was approached. At the heart of that ambivalence is a wish to stop elected Ministers and their henchpersons-if I may use that term-at Richmond House interfering endlessly in the day-to-day management of the NHS. But against that there is also a serious disbelief that when anything goes significantly wrong in some part of the NHS, the Secretary of State will be able to say, "Nothing to do with me, guv. Talk to Malcolm Grant and David Nicholson". I certainly do not see the Health Secretary of the day having the kind of detached relationship with the national Commissioning Board chair that Professor Malcolm Grant seems to envisage in his public utterances. Those remarks suggest that the new national Commissioning Board chair sees himself being left in political peace for two to three years once the mandate has been agreed with the Health Secretary. My experience both as a Minister and as a senior civil servant is that he is deluding himself if he thinks that that is going to happen, but I shall be happy to hear from the Minister what his views are on the relationship between the board and the Secretary of State.
	The first of the amendments in this group, Amendment 96, suggests the placing of a numerical limit on the number of items in the annual mandate provided for in proposed new Section 13A(1). I was prompted to do this by some rumours emanating from the Whitehall gossip mill suggesting that Andrew Lansley saw the mandate as a booklet of indeterminate size along the lines of the operating framework, while David Nicholson saw it as a couple of sides of A4. We want to probe further what the Minister sees as the Government's approach to the mandate. These rumours took me back to three happy years in the early 1990s when I chaired a health authority, at a time when it had 50-odd priorities that had to be accounted for annually at a session with the RHA chairman. In practice, the NHS had no priorities then because the shopping list was too long. However, everybody kidded themselves and felt rather good about life because they felt that they were being held to account for the delivery of a substantial number of worthy and desirable objectives.
	Amendment 96 tries to place a limit-admittedly somewhat arbitrarily-on the scale of the marching orders that the Secretary of State can give each year to the national Commissioning Board. At the same time it tries to distinguish between what one might call must-do's and "attempts to seriously do"-type items. It proposes five of each. As someone who has managed big public sector organisations, I have never attempted to give my managers more than five or six must-do's in any one year, together with a few development items. We need to understand from the Minister the scale of the remit that will feature in this mandate and that will be given to the board. That is the setting in which I think we want to discuss this and I would certainly be grateful if the Minister could enlighten us on the scale of that mandate in terms of the number of priority areas that it is likely to contain. How will the mandate differ from the annual operating framework that has been used to guide the NHS in its priorities over recent years and which has itself got bigger and bigger as time has passed? How will the mandate be related to the resources given to the board and, indeed, the inflation factor allowed for in the resource assumptions underpinning that mandate? The latter is critical in any mandating process because healthcare inflation is typically greater than RPI or CPI, for a variety of reasons which we need not go into today. Keeping healthcare inflation nearer to CPI would be one way of driving NHS productivity. The mandate's financial underpinning is a critical factor.
	Amendment 98 is based on the idea of the Permanent Secretary's letter to a Minister when, having tried everything else, a top civil servant is instructed for political reasons to do something which is, in his or her eyes, essentially against the public interest. We need some transparency in the relationship of the Health Secretary to the board when totally impracticable or unaffordable instructions are included in the mandate by an elected Minister. Amendment 98 tries to give the board a right to raise this formally with the Secretary of State when it thinks that what is being asked of it is totally impracticable, particularly in terms of the resources available.
	Amendment 100 extends this transparency to any other persons consulted by the Secretary of State on the objectives and requirements in the mandate. I look forward to hearing the Minister's account of how these new mechanisms will work and how they will be made more transparent than the Bill provides for at present. I beg to move.

Baroness Murphy: My Lords, I have added my name to the amendments, many of which are from the noble Lord, Lord Patel, because I, too, am worried that the Secretary of State may feel obliged to include in the mandate every last possible objective and priority that the department can think of. Let us remember that it will probably be the department's civil servants that write the mandate.
	For decades, the NHS has prescribed objective-setting as a sort of all-purpose remedy for NHS motivation. Rather than dispensing objectives as a benign, over-the-counter treatment for the NHS Commissioning Board, the Secretary of State needs to conceptualise his objectives in the mandate as prescription-strength medication that requires careful dosing, consideration of harmful side-effects and close supervision.
	Given the impact that objective-setting has on activity in management, I should like to ask for a more self-critical and self-denying approach to the creation of the mandate than has hitherto been the case in NHS priority-setting-hence the rather arbitrary notion that we might have five "musts" and five "maybes". I would like the Secretary of State to restrict his mandate to one side of A4, but I can see a departmental machine creating a mandate which reflects all the recent ministerial enthusiasms-for example, a waiting list here and a choice or two there-and which during its creation becomes a sizeable novel of the unattainable but desirable, or, alternatively, the attainable but unimportant, which were the characteristics of NHS priority lists in the past.
	The mandate should answer the question: where do we want the NHS to go in the next five years, and specifically in the next year, and what resources are we going to dedicate to get there? We should then translate that into something specific that is measurable, achievable and realistic, with time for things that one wants to see for all objectives. If one has more than just a handful of objectives, I suspect that only two or three will ever get done. I therefore wonder how we can be reassured that the Secretary of State will produce a working document of realistic goals.

Lord Hunt of Kings Heath: My Lords, this is one of the most important groups of amendments that we are going to discuss, because, in a sense, it sets the whole relationship between the Secretary of State and the NHS Commissioning Board.
	I have considerable sympathy with my noble friend Lord Warner's Amendment 96, which seeks to avoid the Secretary of State essentially putting in a huge shopping list of demands by limiting the mandate to a maximum of five obligatory and five desirable functions.
	I come back to the recent interventions by the Government in the affairs of the National Health Service. The most recent have been around waiting times, both in terms of what happens to patients who have passed the 18-week target and of the activities of some primary care trusts, which, in order to contain their expenditure, have set arbitrary waits for patients even though they are ultimately treated within the 18-week limit. I have said to the Minister that I have no complaint about the intervention of Secretary of State, which I thought was quite proper, but it is very difficult to see how this will happen under the new system. We have yet to receive a satisfactory answer to it. What in the new system will suddenly obviate the need for the Secretary of State to make such interventions?
	The question then comes to the mandate. Is it, as my noble friend Lord Warner hopes, a high-level document which will focus on a very limited number of objectives, or will it be a shopping list? The noble Baroness, Lady Murphy, expressed it very well as in a sense legitimising "recent ministerial enthusiasms". We were rather given the lie to this when we debated this matter last week, because the Minister suggested that if there was an issue such as primary care trusts lengthening waiting in order to meet the budget, the mandate could be used to prevent it. Indeed, that is the risk-that the Secretary of State will, quite properly, come under pressure to intervene in the health service. The Bill weakens the legal powers of the Secretary of State to do so. The risk is clearly that the mandate will be used instead, and it would be used retrospectively if it does not satisfy the intervention power. I believe that there is great reservation among noble Lords as to whether the intervention power is sufficient, because there has basically to be a failure by the NHS Commissioning Board to carry out the objective. If it is not sufficient for an intervention to take place during the year, my goodness me the shopping list will grow when the new mandate is written. So, there are some very important issues on which we have yet to receive any answer from the Minister.
	There are, however, a number of other important amendments in this group. Perhaps I may ask the Minister to clarify three points. The first point is how long the mandate will last. My assumption, from what Ministers have said and what is in the Bill, is that it will last for a year. The Minister will be aware that the chairman of the NHS Commissioning Board expressed a wish to the Health Select Committee, which was vetting his appointment, that the mandate should last for three years. I wonder if the Minister could clear up that matter for your Lordships.
	Will the Minister also clarify the intention behind the provision in proposed new Section 223D(7)(b), on page 27, which allows changes to total capital and revenue resource use after parliamentary general election takes place? I take it that this is simply to allow for a change of Government but I would be grateful if he could spell that out.
	However, my substantive amendment, Amendment 100A, is concerned with parliamentary scrutiny. In Clause 20, proposed new Section 13A states:
	"Before the start of each financial year, the Secretary of State must publish and lay before Parliament a document to be known as 'the mandate'".
	Surely Parliament is entitled to a little more involvement than merely receiving the mandate as a fait accompli. My noble friend Lord Warner has already pushed the Government in their amendment to give Parliament information about any reservations the board may have expressed about meeting the mandate. I would certainly support that in the interests of transparency. There is also, in Amendment 100, reference to the requirement on the Secretary of State to consult the board, HealthWatch England and other persons, with the results of any consultation on the mandate to be published. That too seems reasonable.
	However, I wonder if we ought not to go further in terms of parliamentary scrutiny. If we take Ministers at face value-and the Secretary of State has expressed a wish to step back from day-to-day involvement in the National Health Service-it is clear that the mandate assumes special importance. Why is Parliament not being given a proper opportunity to scrutinise the mandate before the Secretary of State finally sets it for the NHS Commissioning Board? If the Secretary of State is really going to tell Members of Parliament in particular that he is not going to intervene in a particular question because he considers that now to be the responsibility of the NHS Commissioning Board, in accordance with the mandate that the Secretary of State has set, then I think that Parliament should be entitled to some involvement in scrutiny of that mandate. My Amendment 100A suggests how that might be done. It is built on the system of scrutiny for national policy statements.
	The House will be aware that the Planning Act 2008 introduced a new planning system for applications to build nationally significant infrastructure projects. They cover applications for major energy generation, railways, ports, roads, airports, water and hazardous waste infrastructure. Under this system, national policy on national infrastructure is set out in a series of national policy statements. Under Section 92 of the Planning Act 2008, each proposal for a national policy statement must be laid before Parliament. In so doing, the Secretary of State specifies a relevant period for parliamentary scrutiny.
	If during that scrutiny period either House passes a resolution with regard to the proposal, or if a committee of either House makes recommendations regarding the proposal, the Secretary of State must lay before Parliament a Statement setting out his response to the resolution or recommendations. Following completion of parliamentary scrutiny, the Secretary of State may formally designate the proposal as a national policy statement. The final national policy statement is also laid before Parliament.
	In the House of Lords, national policy statements are normally debated in Grand Committee, but that does not restrict the freedom of committees of the House or individual Members to make use of the statutory procedures. In the event of a Motion for resolution being tabled, the usual channels have undertaken to provide time for a debate in the Chamber within the scrutiny period.
	When I was energy Minister, I had to bring through four energy policy statements. We had three four-hour debates in Grand Committee. They were very thorough. The Government took note of what took place in those debates. In the end, it is up to the Government to make the statement because it is a matter for the Executive. I do not challenge that the mandate, which I regard as important as a national policy statement, is ultimately for Ministers to make. It is rightfully an Executive responsibility. However, the process that I am suggesting in my Amendment 100A would allow Parliament to have much more involvement in the scrutiny. It would allow Ministers to take account of that and then make their minds up in relation to the mandate.
	If the Government are determined to hand over such responsibility to a quango-and I remind the House that in this Bill the National Health Service Commissioning Board is given concurrent powers with the Secretary of State in relation to the crucial responsibility in Clause 1-there has to be a great parliamentary scrutiny of that mandate.

Lord Patel: My Lords, I added my name to the amendments tabled by the noble Lord, Lord Warner. They were prompted by the lack of clarity in the nature of the mandate that the Secretary of State will issue to the Commissioning Board. There is also a lack of clarity in how he will consult the public, although the provision does say that the Secretary of State will consult HealthWatch England prior to issuing a mandate. Who else will be able to scrutinise the mandate?
	On the basis that the Secretary of State will use the mandate to performance-manage the Commissioning Board, what will be the nature of the mandate that will allow him to do that? Will it have measurable outcomes against which the Secretary of State can performance-manage the Commissioning Board? What happens if the Commissioning Board does not agree with the mandate? How is that dispute settled? Will the financial aspects be a major part of it or will it be better outcomes for patients?

Lord Owen: My Lords, I support the amendment spoken to very ably by the noble Lord, Lord Hunt. The case is utterly convincing in every respect. The use of the word "mandate" is strange in parliamentary terms. It presumably owes something to the idea of legitimacy. We talk of a mandate coming from the electorate. If the Bill is to use this term, I imagine that it is in the belief that it is a mandate from the Government. It has always been recognised that if there is a mandate from the electorate going to the Government then that mandate from the Government must be checked by Parliament. It would be extraordinary if there was any period when the mandate could not be discussed. It has been widely said that the mandate will last for a year, although that has not been officially confirmed. It is essential that we hear from the Minister how long the mandate will run. But with a period of even six months it would be irresponsible for Parliament not to comment on it and have the facility to debate it.
	Here we come to the nub of this whole question. We have already been there on the question of the Secretary of State's powers. Are we really considering putting this vast block of government expenditure out into the void with no requirement or capacity for the Government to be held to account by Parliament? This is an absolutely essential amendment. Were it to be rejected, we would have a very clear idea of what the Government's views are about the role of the Secretary of State. I have said before that I call this Bill the Abdication of the Secretary of State Bill.
	We can argue about this but the Government have a majority and are going to push this legislation through. For all the balmy words and the assurances we hear, this legislation will, I am sure, near the end of the day, emerge very much as it was originally presented. There is a logic to it and there is no doubt that the Secretary of State has not come to his position lightly or without thought. He was in opposition for many years and is very knowledgeable about the health service. He has a philosophical position. He wishes to take the NHS out of politics-the old slogan of the BMA for years and years. However, that position was rejected by every single Conservative Government since the Act was first introduced because they believed it was impossible to take such a large sum of money out of the realm of politics. It seems amazing that we have not yet had a single, serious argument as to why this strange new philosophy should be introduced. Where there is substantial government expenditure, which comes from taxpayers and is not owned by the Government, there should be accountability throughout the process.
	I have also raised another, and, I feel, much deeper, issue. The British people, over all these years, have accepted that our spending on health-which is actually less than that of many other comparable nations-is rationed. It is no use us ducking the fact that we are making massive changes to an institution that has extraordinary levels of public support and has had such support ever since it was introduced. The fundamental reason-I can find no other justification-is that there is a sense among the British people that they have had their say in this rationing process. They have had a mechanism for feeling that the choices and distribution of finances have been debated and that therefore it is a choice they can support. If we tamper with that process, we tamper with a very serious element-this acceptance of the rationing process and this support for the NHS.
	Some measure of parliamentary accountability has to be written into the Bill at every juncture where it makes sense. This will come up in the debates on the Secretary of State's powers, which are still to come, but many of us have expressed the view-I have certainly written about it-that the health service is overcentralised, that a degree of decentralisation in decision-making is necessary, and that there needs to be less micromanagement. These issues are broadly accepted. But we come now to this mandate. I would have chosen a different word and a different mechanism. However, if that is the only mechanism we can amend, how can we reject the idea of some measure of parliamentary accountability, of writing in some other priorities and of questioning the decisions of the Minister?
	Amendment 98, tabled by the noble Lord, Lord Warner, is very necessary. He and I may remember a day when the Secretary of State at the time was intent on the policy of pay beds. I was fully associated with the policy, even though I am not so sure it was the wisest policy in retrospect. It was very interesting that the then Permanent Secretary exercised his responsibility and came in and argued against the proposition. We claimed we had a mandate from the electorate as it had been in the Labour Party manifesto in the 1974 election. He nevertheless produced a rational argument why that should not be done at that particular time, following the reorganisation of the National Health Service. The noble Lord will remember this very well because he was on a committee that was looking at this very issue. The Permanent Secretary said that it was the wrong timing quite apart from the issue of principle as to whether the measure constituted the right politics. I should say in fairness to the then Secretary of State, Barbara Castle, that she gave him a proper hearing, questioned him and explained the situation. He said at the end of the day, "If you decide to go ahead with it, that is your choice and we will loyally support it". I think that few people who dealt with those officials had any belief that they had anything other than 100 per cent commitment to the measure. They had fulfilled their constitutional responsibilities and there would have been much merit in the issue being forced out and discussed. People should have known that opinion. In our present system these opinions do not often come forward.
	At least under the system in place at that time there was constant scrutiny of the Secretary of State through Parliament. In this situation where the Secretary of State, having issued his mandate, will pull out of any form of day-to-day accountability in Parliament, scrutiny becomes ever more necessary. The transparency has to be on both sides. The officials-in this case, the Commissioning Board-have a perfectly reasonable right to make clear to Secretaries of State that they think the mandate that has been pushed on to them is not deliverable. That should then be made known to the public. Similarly, the commission and the Secretary of State should know what Parliament's view of the issue is. I await the Minister's response, which will flavour a lot of one's attitude to other important debates about the powers of the Secretary of State which we have still to resolve. The Government should indicate whether this is a totally "geek" Bill with the strange philosophical position that Parliament must never put its dirty fingers on any aspect of the National Health Service. Are we to have a grown-up, adult debate about the degree of decentralisation and the degree of management that will be devolved, or are we going to have a clear-cut line whereby Parliament in effect has no responsibilities at all?

Lord Harris of Haringey: My Lords, I confess that I am something of a cynic about some of the proposals in the Bill. I am a great believer in the principle of localism, the local determination of services and local decision-making. Therefore, in principle I would applaud any Government-even this Government-who desire to devolve responsibility for various things to local authorities and, in this case, local commissioning groups.
	However, my cynicism kicks in because what I suspect is happening here-I suspect that it will happen in other service areas-is that Ministers are cynically saying, "We are leaving these responsibilities to you, the local bodies concerned. We are very happy for you to make all these decisions. The snag is that we will not provide you with the resources to meet all the expectations that the public, who rely on those services, might legitimately have hoped to be provided. However, we are not taking these decisions. We will not be involved. It is a matter for local determination". To be honest, I think that is what underpins much of the localism, devolution or autonomy agenda that we are seeing.
	However, the experience of all previous experiments of localism is that while Ministers say, "Yes, this is a wonderful idea. We want to do it", pressure starts to be applied to particular things. They want to have a mechanism whereby they can say, "It is, of course, your decision. However, we want you to make sure that these things happen". Gradually, the list of the things that must happen gets longer and longer and the list of areas of discretion gets shorter and shorter.
	When I saw the proposal for a mandate to be in the Bill, I thought that that was the mechanism whereby on the one hand Ministers will proclaim that they have no involvement in these decisions and say that they are all local decisions, but on the other hand this will enable them to ensure that certain things still happen because they are being subjected, as elected politicians, to pressure to make sure that they happen. That is why the amendment of my noble friend Lord Warner, which would restrict the extent to which this could be done, is very important. If we do not have an amendment of that sort in the Bill, I can tell you now what will happen; every single pressure group, voluntary organisation and lobby will say, "We want included in the mandate", which is being issued to the national Commissioning Board, "the following service. We will want to see it there."
	For any sensible Minister the simple answer to all this is to write an extremely long mandate that covers all those points rather than sticks to them. If they were obliged to be limited to just five or six or another small number of issues, that would be extremely salutary. It would stop the creep that would happen. However, I suspect that the Government are not going to say suddenly, "My goodness, the noble Lord, Lord Warner, has come up with an excellent idea. Why didn't we think of that? We must accept it, of course", because unfortunately that is not always the way in which government Ministers react. They will stick to the letter of the Bill without those specifications. They will say, "Well, why five? Why not 10? Why not 12? What about three?". All these different things will be argued as an excuse for not doing it. You will then get the drift and the pressure to say that more and more things must be added.
	Amendment 100A is so important because there must be parliamentary scrutiny of what is happening, because this will be the mechanism that drives decision-making in the NHS. It is not going to be a pure version of devolution, localism and autonomy; this is going to be done through the mandate. The mandate is then going to be the most important document that drives the NHS at any one moment. That is why parliamentary scrutiny is essential. Parliament must have the opportunity not just to see it and to know what is being done in the name of the public but to comment, amend, or put forward amendments and have the Government respond to them.
	I therefore hope that when the Minister responds he will accept not only the principle of my noble friend Lord Warner's amendment but the principle of detailed parliamentary involvement in this process in the amendment of my noble friend Lord Hunt of Kings Heath.

Baroness Williams of Crosby: My Lords, I will comment further on Amendment 98. One of the great qualities of the amendment is that it would oblige all of us to confront directly the huge strain between the rising demand-4 per cent a year over recent years-for National Health Service services, and the limitations on resources to which the noble Lord, Lord Harris of Haringey, has eloquently referred. It is vital that if we are going to carry the public with us in making the changes, which will be required regardless of whether the NHS survives or not, to service configurations, to the way in which ancillary professions are used, and to the whole range of community activity and help, we have to get the whole of the public and Parliament to understand how acute the pressures on resources are and how very necessary the need for change is.
	It is therefore vital that we take due responsibility as Parliament and as a whole nation for the changes that will be required. All of us in this House recognise that service configuration is going to be the key way in which we deliver quality services with straitened resources. However, we should not pretend to ourselves that service configuration will be anything but extremely difficult. It will be politically difficult in particular, for the reasons which the noble Lord, Lord Harris of Haringey, pointed out. Any time you configure a service in a way that, for example, results in the closure of hospitals or other medical centres, you will encounter huge public resistance, because the public like, as is very much evident, exactly what they have. It is very sad that we have to explain, regardless of how we vote on this amendment or any other amendment, that there is this straitened position between resources and demand.
	That is why Parliament, too, must accept its responsibility and not press for changes that simply cannot be afforded. Unless we have an amendment like Amendment 98, which is fundamentally part of the whole parliamentary structure within which the NHS or any other form of health service has to operate, we will not start on the crucial business of persuading and training the public as well as the medical profession and ourselves about the absolute necessity of fundamental change, regardless of the actual management structure that we happen to have at the time. I personally believe the NHS has a remarkable management structure. There are others who believe that it does not, but the one thing one can say is that the crucial issue is not so much management structure as how one actually handles the massive process of change that now confronts us.

Earl Howe: My Lords, I hope that I can demonstrate to the Committee that the portrayal of what the Government intend through these provisions is a false one. We wish to create a transparent and accountable system in which every organisation understands its duties and responsibilities. Clause 20 sets out further provisions for the NHS Commissioning Board. It requires the Secretary of State to publish a mandate to the board setting out objectives and requirements as well as the board's resource limits. The mandate is one of the key levers that Ministers will have in order to set a national health policy and influence the way in which taxpayers' money is spent on delivering NHS services. It lies at the heart of the Secretary of State's continuing accountability for the health service.
	In a moment, I shall cover the provisions concerning transparency prior to the publication of the mandate, but once the mandate has been published, the Bill requires the board to publish its business plan, setting out how it will deliver it. The Bill also requires it to report on what it has previously achieved in its annual report laid before Parliament. The Secretary of State must then publish an assessment of the board's performance. Taken together, that will provide what we believe is an unprecedented degree of transparency about what the NHS is asked to achieve and what is delivered.
	The noble Lord, Lord Warner, suggested that, having issued the mandate, the Secretary of State would detach himself from the health service from that point on. That has never been our vision and it will not happen. I say to the noble Lord, Lord Hunt, in regard to his example of waiting times, that he will know that the board and all the commissioners will have to have regard to the NHS constitution, and within the NHS constitution is a standard which says that patients can expect to wait no longer than 18 weeks. That duty is in the Bill and we do not intend to change it. It is also open to the Secretary of State to stipulate conditions to be included in the NHS standard contract. Again, the noble Lord will know that within the NHS standard contract there is a stipulation about waiting times.
	The Bill requires the Secretary of State to keep the board's performance against the mandate under review throughout the year, over and above his general duty to review the performance of all national bodies. I refer the noble Lord, Lord Owen, to Clause 49 of the Bill which sets out that duty.
	Amendments 96 and 153A, tabled respectively by the noble Lords, Lord Warner and Lord Hunt, would limit the number of objectives in the mandate and remove the ability to amend it in-year following an election. I do not yet know how many objectives the mandate will contain. That will emerge from the process of engagement and public consultation that we will undertake, but I am confident that, given that the NHS Commissioning Board will receive around £80 billion of funding, there will be many more than 10. Setting an arbitrary limit, as the amendment seeks to do, would undermine Ministers' legitimate ability to set strategic policy for the NHS.
	As a result, although I support the broad intention of the noble Lords, I think a better way of achieving the desired outcome is not to put crude limits on Ministers' powers, but to ensure that they are used proportionately. That is what the autonomy duty in Clause 4 does. I hope that helps to explain to the noble Lords why we think that duty is so important.
	The noble Lord asked whether the mandate would contain desirable as well as obligatory objectives for the Commissioning Board. That is not our intention. The Bill will require the board to seek to achieve all the objectives in the mandate and the board will then be legally required to comply with all the requirements set out in the mandate.
	The noble Lord, Lord Hunt, asked me about the period-

Lord Warner: I would like to pursue the last point the Minister made. Is he saying that, after a lot of consultation, the Secretary of State may say, "I have 35 objectives for you, laid out in the mandate, and I claim that the justification for that is the consultation process that we have had. You, the national Commissioning Board, better get on with it, and we will look at what you have done at the end of 12 months to see whether you have delivered those 35 objectives"? Can the Minister give us some idea what failure would look like? Would it mean failure on 10 objectives, or five, or 15? Where does the point come when the chairman and the chief executive get fired because they have not delivered the objectives in the mandate?

Earl Howe: The noble Lord is taking us into a hypothetical realm. I understand why he is asking those questions, and I think the answer would depend on the degree and scale of the failure. I have just said that the Bill requires the board to seek to achieve all the objectives in the mandate. It would be up to the Secretary of State to judge whether it had used its best endeavours to do that. The performance of the board will be a matter of public record; it will be up to Parliament to take a view on that, as well.

Lord Davies of Stamford: I am most grateful to the Minister for giving way. Could, or would, the mandate include any way to prioritise between the potentially 35 different tasks that are being imposed on the board?

Earl Howe: It could do. However, that is to be determined. I would welcome the views of the noble Lord on that, if he has particular examples in mind.
	This brings us to the question the noble Lord, Lord Hunt, asked about the period which the mandate will cover. It will be a multi-year document, updated annually, which is intended to provide a stable policy context for the board. There may be circumstances which call for the mandate to be updated in-year, including after a general election, to ensure that an incoming Government could start to implement their manifesto commitments for the NHS in-year. Any revisions to the mandate will be open and transparent. If the mandate is revised, it must be published and laid before Parliament with an explanation of the changes.
	I will now comment on Amendments 98 and 100, tabled by the noble Lord, Lord Warner, and Amendment 100A, tabled by the noble Lord, Lord Hunt. These rightly highlight the importance of transparency and parliamentary scrutiny of the mandate. I completely sign up to transparency as a principle. In the first place, there will be a public consultation. Alongside that, we will engage with stakeholders, including the board, to ensure that we set ambitious but achievable objectives. It is essential that the Government hold the board to account for objectives that are achievable. It is not in anybody's interests to set the board up to fail. At the same time, where there is scope for improvement in the health service within the resources available, the mandate should and will ask the board to drive such improvements.
	Ministers have a legitimate right to be ambitious on behalf of citizens and taxpayers, but we know that getting the balance right and setting objectives that are affordable and ambitious will not be straightforward. Much of the answer lies in transparency. There will be open public consultation on the Government's objectives for the NHS. I can assure noble Lords that the process of developing the mandate will be open and consultative, including a formal 12-week public consultation. We intend to publish a consultation response as well as a summary of the responses we receive.
	I point out that the Bill places a duty on the Secretary of State to consult the board and HealthWatch England before specifying the objectives and requirements in the mandate. We should be clear about how that changes the current arrangements. At present, decisions about the Secretary of State's priorities for the NHS can be decided without reference to, or consultation with, anyone, as we saw under previous Governments. Top-down targets can be set without consultation. The priorities for the NHS are issued around this time every year through an operating framework without any need for consultation. Under the Bill, for the first time parliamentarians and the public will have the opportunity to consider and challenge the Government's objectives for the NHS every year. No previous Government have ever allowed this. It will highlight and reinforce, year by year, Ministers' overarching responsibility for a comprehensive National Health Service free at the point of need.
	The consultation will provide a period in which Parliament will be able to scrutinise the Government's proposals-as will the Health Select Committee if it chooses. It is appropriate that this consultation should take place before the mandate is published. We must provide clarity of purpose for the NHS. A period of additional parliamentary scrutiny after the mandate is published, which is what the amendment proposes, would be disproportionate and very disruptive. It would reduce the time the NHS has for planning and would create uncertainty in the service.
	There will of course be formal parliamentary control over any legal requirements set for the NHS through the standing rules and any other regulations. The Bill not only gives Parliament an unprecedented role in setting out the roles and responsibilities in the NHS but increases parliamentary scrutiny by requiring detailed parameters and requirements to be set in regulations rather than in ministerial directions that have no scrutiny at all. I hope that noble Lords will give the Government credit for that package of proposals.
	In addition, we have accepted the recommendation of the Delegated Powers and Regulatory Reform Committee that the requirements in the mandate should have the force of legislation and should be in an instrument subject to the negative procedure.

Lord Owen: It sounds very reasonable, but effectively the pre-consultation period will involve the board, HealthWatch England and such other persons as the Secretary of State allows. Parliament will not always be fobbed off with the answer that the Minister is still considering the issue. That is perfectly reasonable; we all know that a normal consultation period is required by all ministries, and certainly the Department of Health has observed this over many decades. It is when the Minister makes up his mind that Parliament will know what the policy is-and if it is in legislation it will be at that stage that there will be an intervention from Parliament with the right to challenge it. Therefore, it is perfectly reasonable to ask Parliament to come in after the consultation period because then it will know what the Secretary of State is proposing.

Earl Howe: Of course, Parliament is the sovereign body and can do whatever it chooses. Nothing will prevent it commenting on the mandate once it has been published. No doubt the Health Select Committee will wish to do this. My point is that to expect the process to feed into a regurgitation or reformulation of the mandate would be unfair on the NHS. The opportunity for Parliament to have its say should surely be during the normal consultation period. Parliament will be able to see the extent to which the Secretary of State has responded to whatever comments it has made.

Lord Hunt of Kings Heath: I take up the point that any debate in Parliament should be after consultation has taken place so that Parliament will know what the Secretary of State has decided. The Minister said that this would be debated by a sovereign Parliament. However, he will know that translating that into real time for debates in which noble Lords can question Ministers is problematic. The beauty of the Planning Act 2008 was that it laid down a requirement that was then turned into procedure. Perhaps the Minister will reflect on this. As he rightly said, this mandate is a very important indication to the health service of the Secretary of State's wishes. If the department gave some further thought to this matter, it might come to the conclusion that it would be right to allow parliamentarians to have a go at the mandate-to question Ministers-before it is finally signed off.

Earl Howe: My Lords, I was just about to comment on the recommendation of the Delegated Powers and Regulatory Reform Committee that the requirements in the mandate should have the force of legislation, in an instrument subject to the negative procedure. The board will have to comply with the requirements in order to support delivery of the objectives in the mandate that it must seek to achieve. Parliament will therefore be able to scrutinise the requirements after the mandate is published. We will bring forward a government amendment at Report stage to achieve that recommendation of your Lordships' committee.
	That is not the same as opening up the actual objectives in the mandate-that is to say, the direction and the strategy that the Government of the day want to set for the NHS-and rightly so. If that were to happen, it would lead to unwelcome delay and uncertainty for the health service. The Delegated Powers Committee, which has great expertise in this area, did not suggest that any further parliamentary scrutiny of the mandate was necessary. I can reassure the Committee that if Parliament were to make a recommendation concerning the mandate after it is laid before Parliament, the Secretary of State would undoubtedly have to respond, just as Ministers do now as a matter of course.

Lord Warner: I have been cogitating what the Minister has been saying, in his normal, plausible way, about the consultation with everybody before the mandate is agreed by the Secretary of State. The trouble that I have with that, worthy though it is, is that it does not really deal with the point in my Amendment 98, and in some ways it makes the situation worse. My amendment is all about how the national Commissioning Board answers back and tells Parliament if it thinks that the final mandate is undeliverable. That is the purpose. If you have extensive public consultation, the point that my noble friend Lord Harris made earlier comes into play. I am sorry to have got a bit fixated about the figure of 35, but you end up with 35 propositions in the mandate, and the money available to the Secretary of State at that point is still the same as when he went out to public consultation. We run an even greater risk of having a very overloaded mandate, with lots of items in it which come out of the public consultation. The money has not changed. The board is expected to deliver a larger number of things with the same amount of money. That is why my Amendment 98 becomes even more important if the Minister is going down the path that he says that the Government are going down.

Earl Howe: As I said, there will be full public consultation on the mandate. It would of course be possible for the Health Select Committee or indeed other parliamentarians to scrutinise and challenge the mandate at that point. If changes to the mandate were made in-year as a result of that process-that is not inconceivable-then a revised mandate would be published. It would be laid before Parliament with an explanation. After the mandate comes into force in April 2013, Parliament will have all the usual opportunities to ask questions about the performance of the board against the mandate. The board in addition will include in its annual report an assessment of performance against the mandate, and that will be published and laid before Parliament.
	The noble Lord, Lord Hunt, asked me how we will know what the board said when it is consulted about the mandate. As I am sure he knows, the Government have a code of practice on consultation that we would follow. That code sets out the expectation for the Government to respond to the consultation and in doing so to provide a summary of the views expressed to each question as well as of what decisions have been taken in the light of them.
	The noble Lord, Lord Patel, asked a question that the noble Lord, Lord Warner, also asked me about what would happen if the board disagrees with the mandate. The mandate sets out the objectives that the Secretary of State considers the board should seek to achieve. Those objectives will be developed in close co-operation with the board. It will not be a detached process. Indeed, the Bill requires the Secretary of State to consult the board before setting the mandate. Nevertheless, decisions about the content of the mandate will ultimately rest with the Secretary of State, and I contend that that is entirely appropriate. It is the Secretary of State taking responsibility on behalf of the Government for what he is requiring the board to achieve.
	I hope that I have shown that the level of transparency and of public accountability over the mandate will be very great indeed. I do not share noble Lords' apprehensions that somehow Parliament will have no opportunity to comment on the mandate. Quite the reverse is the case. We will ensure that it does, and it is right that it does. This is an entirely new situation for the NHS. I hope that that is welcome to noble Lords and that I have said enough to persuade the noble Lord, Lord Warner, to withdraw his amendment.

Baroness Jay of Paddington: I wonder whether the Minister can help me with a point he made in response to the noble Lord, Lord Owen. He was raising some important points of principle about the Secretary of State's role and the way in which it, as it were, percolates through so many of the provisions in the Bill, and the Minister referred to Clause 49 as being something that should ease those concerns. I realise that we are not discussing Clause 49 at the moment, but the Minister and the Committee will remember that the Select Committee on the Constitution was concerned that Clause 49 was not an adequate answer to some of these points of principle that were raised by, among others, the noble Lord, Lord Owen. Can the Minister help me this afternoon on that?

Earl Howe: The noble Baroness knows that I have undertaken to engage in discussions outside this Chamber about Clauses 1 and 4 and their relationship with Clauses 10 and 20, and that is what I intend to do. There is a boarder question here. My point to the noble Lord, Lord Owen, and the noble Lord, Lord Warner, who suggested in his opening speech that somehow the Secretary of State would detach himself and say, "Not me, guv" about anything that happened in the health service, is that they are mistaken because Clause 49 requires the Secretary of State to keep health service functions under review-in other words, not just the functions, but the effectiveness of the exercise by the bodies of those functions in relation to the health service. That is a very powerful duty. It is not a signal that the Secretary of State can just detach himself from what is going on in the health service. If he is holding the board to account, it involves him doing what Clause 49 requires, and I do not think that anything in the Bill negates that.

Lord Owen: The procedure in another place is deliberately very limited in terms of getting to a legislative change. This mandate has many of the qualities of legislation. It lasts for a year. It is going be a fixed statement. Is the Minister really telling us that the Secretary of State will not be saying that, because the mandate has been given, this is a question for the commission or the board-one which would he would normally accept on the Floor of the House? Past experience is that he will pass that responsibility on the Floor of the House to, in this case, the commission. This is what concerns many people: there will be a change in procedure in how questions are answered in the House of Commons. The Minister has still not answered the question. This amendment allows a substantive change in the mandate that would stay for a year to be instituted by Parliament after it knows what is in the Minister's mind, and he appears to be rejecting that. Is he rejecting that?

Earl Howe: I am surprised that the noble Lord, Lord Owen, thinks that the health service should be run in that way; that is, Parliament in effect mandating requirements to the health service whenever it chooses. I do not think that is a helpful idea. I think it is helpful for the Secretary of State, as now, to take responsibility for the health service but in the future to take direct responsibility for what lies in the mandate. Should events during a given year raise questions about the performance of the board, the Secretary of State would be answerable to Parliament for whatever the event was, and he would indeed have to take the necessary advice from the board. What he would not be saying is, "This is not my concern, guv". He is answerable to Parliament in the ways that I have indicated. There is obviously a need for the board to take responsibility for the day-to-day management of the health service. However, we are seeking to achieve a balance between the Secretary of State taking responsibility in Parliament for what is in the mandate and the outcomes that he has set for the health service.
	This is a shift of responsibility, it is not an abdication of responsibility-that is the distinction. Power is a zero-sum game. If you shift power from the Secretary of State down to the health service, you cannot at the same time expect the Secretary of State to retain the same degree of power. We are transferring power in two directions; from the Secretary of State downwards, and from the Secretary of State upwards to Parliament. That is the picture that I hope noble Lords will keep in their minds.

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Earl, but there are some extra points here. What we have seen from the Secretary of State recently is no desire to desist from day-to-day involvement in the National Health Service. We have seen a number of interventions-which, as the noble Earl knows, I welcome; I believe that is the duty of the Secretary of State. I am still completely mystified as to how the Secretary of State will do this in the future. I can see that you have the NHS constitution; I can see that in the objectives set in the mandate the Secretary of State will say to the NHS Commissioning Board, "You will do the right thing on waiting times". However, what happens if, because of resource constraints, clinical commissioning groups put in artificial devices to extend waiting while still meeting the 18-week targets? They will be okay under the constitution, but that action is found to be unacceptable in PCTs now? Where does the intervention come? The Secretary of State will be required by Parliament to intervene. There will be no getting away from that.
	The second point is about accountability upwards. I say again to the noble Earl that I do not know why he will not take this point away. We have the Planning Act 2008; we have had a highly successful process of examining national policy statements, which must be of the same degree of importance as the mandate. It has been clearly set out how Parliament will scrutinise those: it allows in your Lordships' House a process in Grand Committee and then in your Lordships' Chamber if a Motion is moved. However, at the end of the day the Secretary of State can ignore what Parliament says because it is the Secretary of State's responsibility to set the national policy statement as he would the mandate. If the Government are claiming that this is an appreciable shift of power, I am puzzled as to why on earth Parliament is not allowed more involvement in scrutinising the mandate.

Earl Howe: Because it would get Parliament into the territory of micromanaging the health service, if it so chose. That is not the territory we would want to be in, any more than we wish the Secretary of State to micromanage the health service. That is the problem. The Secretary of State has to take responsibility for the objectives set for the health service. I think there is a general acceptance among those in the health service and indeed the public at large that the health service has to be judged on a different set of measures than it has been in the past-namely, on its outcomes and the cost effectiveness with which it approaches the use of the budget given to it.
	We believe that undue political influence is undesirable. Parliament is capable of exercising that kind of interference every bit as much as a Secretary of State. We are saying, however, that Parliament has every right to scrutinise the Secretary of State's proposals, to feed into those proposals, to be listened to and to be responded to. However, in our contention, it is undesirable for us to go beyond that because in the end, the health service has to know where it stands. If this is an endless process of Parliament second guessing the mandate and coming forward all the time with suggested changes, we will not have a workable system.

Lord Warner: My Lords, we have had a very interesting debate on Amendment 96. I cannot say that I have been convinced by the noble Earl's argument that he will not have a large amount of clutter in this mandate as a result of this public consultation. The poor old NHS will have to make the best of it. I suspect that at some stage we will come back to this issue of placing some limit on the objectives and requirements. In the mean time, I beg leave to withdraw Amendment 96.
	Amendment 96 withdrawn.
	Amendments 97 to 97A not moved.
	Amendment 98
	 Moved by Lord Warner
	98: Clause 20, page 16, line 26, at end insert "and be prepared to inform Parliament of any major reservations expressed by the Board in writing on the practicality of meeting those objectives or requirements within the resources to be made available to the Board."

Lord Warner: My Lords, I found the arguments used by the noble Earl on this particular amendment in this debate utterly unconvincing. We have a very serious risk, in the process he described, of a level of overload on the board which is unrealistic in relation to the resources available. I can just imagine the kind of negotiations that will take place between Richmond House and the board, wherever it is, up in Leeds, to try to ensure that the Secretary of State is not embarrassed. We need something along the lines of Amendment 98. The noble Earl has not been willing to take this away and consider it, and so I wish to test the opinion of the House.

Division on Amendment 98
	Contents 198; Not-Contents 236.
	Amendment 98 disagreed.

Amendment 99
	 Moved by Lord Patel
	99: Clause 20, page 16, leave out lines 27 and 28 and insert-
	"(b) Healthwatch England, and"

Lord Patel: My Lords, I apologise to the Minister and to the noble Baroness, Lady Northover. Yesterday afternoon I told them that I was degrouping these amendments to be taken at a later stage of the Committee. That was, however, before I got beaten up later in the day and lost my normal aggression. I had to retable them and I apologise for that. I hope that it is possible to take them today.
	I will concentrate mainly on HealthWatch England. The purpose of this amendment is simple-to make both HealthWatch England and local healthwatch organisations independent bodies and, in doing so, to give patients and public a truly independent voice. It does not change the broad thrust of the policy in any way, nor does it have any more resource implications.
	In the Government's list of intentions for HealthWatch England, the Minister recognised the need for it to maintain independence; to set its own work programme; to publish its own annual report to Parliament; and to have independent membership. He also said that regulation would be brought forward by the Secretary of State in relation to this. It would also provide advice directly to the Secretary of State, the NHS Commissioning Board, Monitor and local authorities. At the same time, the list also suggests that HealthWatch England will be able to advise the Care Quality Commission on the views of people who use the service; that it will be a committee of the CQC; and that the CQC will respond in writing to HealthWatch England's advice.
	HealthWatch England's operating plan, which was discussed by the CQC board, suggests that its main focus will be local; it will be small and strategic; its accounting officer will be the CEO of the CQC; its staff will be employed by the CQC; and service-level agreement on its functions will be put in place. The plan also suggests that HealthWatch England's committee will be appointed by the CQC; that its chair will be subject to CQC board governance; and that conflicts of interest will be decided by the board. HealthWatch England will publish reports on a "no surprise" basis. This is quite contrary to the suggestion that HealthWatch England should be independent of the CQC. The CQC clearly sees itself having a close relationship with HealthWatch England, with the latter relying on it for significant analytical intelligence and other analytics and data. Joint data collection will not be appropriate for the diverse functions of the two organisations. The relationship between the two has not had a good start either, with LINks and others feeling that they have not been fully consulted by the CQC in developing the plan.
	The proposed duties of HealthWatch England are intended to provide local healthwatch organisations with advice and assistance in relation to promoting and supporting the involvement of people in the commissioning, provision and scrutiny of local care services. Under the duties, people will be able to monitor local health and social care services; their views will be obtained on the standard of local services; and information will be gathered on local need for and experiences of care services. Recommendations will be made to commissioners and providers of services about how local care services could or should be improved.
	The relationship between HealthWatch England and local healthwatch organisations is important. The Bill establishes HealthWatch England as a statutory committee. Ministers say that the relationship between HealthWatch England and local healthwatch organisations must be an open dialogue so that critical knowledge of the views and experiences of patients and local service users will have a real influence on the delivery of health and social care. The aspiration is that local healthwatch organisations and HealthWatch England will collaborate with local authorities and clinical commissioning groups. However, the Bill does not give local healthwatch organisations any specific role in relation to clinical commissioning groups. They have no direct role in influencing the commissioning arrangements of CCGs in relation to the needs of local people, nor do they have any say in it.
	In my view, therefore, HealthWatch England should be established as an independent body outside the CQC; be the guarantor of an independent local community voice; have clear accountability to local healthwatch organisations; and have adequate resourcing-there are concerns that the CQC will not adequately fund HealthWatch England. It should provide an expert team that has the knowledge and experience to build HealthWatch; and support the transition of LINks into healthwatch organisations and the development of local healthwatch's ability to carry out its five statutory functions. It should provide local healthwatch organisations with support, training, advice, resources and expertise on health and social care policy, legal processes and myriad other issues if local healthwatch is to take off quickly. On the basis of current and previous experiences, I feel that the CQC's belief that local healthwatch can be built and become operational quickly is misplaced-that is the experience of LINks, too.
	HealthWatch England should have a capacity to carry out research that is needed by local healthwatch organisations to support their work. HealthWatch England should support the development of local expertise to gather information and data from all sources-public, patients, complaints and serious incident investigations-so that it has a well developed and informed view of the state of local health and social care services. It should support the development of regional healthwatch organisations so that a powerful regional voice on services and commissioning can be developed. It should provide the capacity to elevate local and regional demands for better health and social care to the NHS Commissioning Board, the Secretary of State, Monitor and the CQC. It should support the co-ordination of major demands for changes to health and social care policy and commissioning, integrating local healthwatch.
	It was pointed out to the CQC that a research capability was essential for HealthWatch to function. If a potential service problem is suspected, it is necessary to check how widespread it is. Beyond this, the organisation must be able to carry out original research on consumer needs in order to improve services. No research capability had been placed in the plan that the CQC develops. It appeared in meetings with LINks that the CQC might commission research, but we know from examples that research at a local level is important-staff being the classic example.
	Diverse and inclusive healthwatch organisations could substantially increase the power and influence of local people to monitor services more effectively, improve safety, influence commissioning and provide a voice that will be heard in the local, regional and national development of health and care policies. To be effective, HealthWatch, nationally and locally, must be fully independent and democratic. Others with experience have informed me that the dependent relationship that HealthWatch is intended to have in relation to local authority is deeply flawed. They believe the proposed system will be expensive and difficult to establish. The decision not to ring-fence funding will make these bodies weak and vulnerable.
	The way forward is for HealthWatch England to be an independent body helping the local healthwatch organisations, which should also be independent of local authority. If the Government are serious about what they say-that the Bill is about putting patients and the public at the centre and the slogan,
	"no decision about me without me",
	is what they wish to follow-then the way to create public confidence is to have HealthWatch England as an independent body. I beg to move.

Baroness Wheeler: My Lords, I start by saying that I was not one of the ones who beat up the noble Lord, Lord Patel, over grouping issues, although it was extremely frustrating to have them appear and disappear all the time. Anyway, we now have our list and I am speaking to that.
	I am pleased to support the amendments in the group, which have two important aims. First, to ensure that HealthWatch England and local healthwatch organisations are truly involved and consulted where decisions are made about the development and planning of commissioning services and on reconfiguration or changes to services. Secondly, to ensure that it is an independent statutory body and not a subcommittee of the Care Quality Commission.
	The Government's far-reaching proposed changes to the NHS, with the emphasis on competition and regulation, make the need for HealthWatch England to be given robust and independent scrutiny powers even more important. Amendment 305 from my noble friend Lord Harris and myself is a probing amendment with the intention of ensuring that HealthWatch England and local healthwatch organisations have the strengthened power and functions they need. It establishes HealthWatch England as an independent body responsible for providing the Secretary of State, the NHS Commissioning Board, the Care Quality Commission, Monitor and local authorities with information and advice on the views, needs and experiences of users of health and social services, and the views of local healthwatch organisations on care standards and how they can be improved.
	Under Amendment 305, HealthWatch England is responsible for providing local healthwatch organisations with resources, advice and assistance. The amendments of my noble friend Lord Whitty, Amendments 318C and 318D, set out similar and additional powers and functions for HealthWatch England to those proposed in Amendment 305. We fully support these, which include powers of investigation into complaints and powers to seek disclosure of information from health and social care providers, the NHS Commissioning Board, CQC and others. Important functions also include information, research and representation functions.
	The independence of HealthWatch England from the Care Quality Commission is vital if it is to be the national service users' watchdog and champion. It must be able to hold regulators in the whole of the health and social care system to account and be the independent guarantor of the rights, duties and independence of local healthwatch organisations. Given the uncertainties still surrounding how Monitor and the CQC will work together, and the current trials and tribulations facing the CQC, how realistic is it to expect the CQC to undertake this role or for HealthWatch England to function properly as a CQC committee?
	Does the Minister acknowledge these problems? Will he-or she-consider working with NLAM and other interested stakeholders to produce an alternative model for HealthWatch England that will secure the Government's stated policy for a powerful and independent system of public involvement in health and social care? To be effective, local healthwatch must be able to scrutinise how consortia and health and well-being boards undertake public engagement and transparency and are ensuing that the public voice is embedded in the care pathway design. They should also be given the right to comment on tenders and commissioning contracts before release.
	LINks organisations currently have significant powers to enter and view the premises of all health and social care providers regulated by the CQC-another potential conflict of interest if the CQC relationship is not changed. These powers are often little used by local LINks organisations and we hope that their retention in the Bill and robust guidance to local healthwatch organisations on how they can be applied to the benefit of improved patient care and treatment will lead to these important powers being more frequently used. I would welcome the Minister's endorsement of that.
	On the question of the transition from LINks to HealthWatch, we would underline that the involvement of LINks organisations is essential to ensure that the skills, knowledge and dedication of the existing volunteers are not lost. I also emphasise the importance of ensuring that healthwatch local organisations are properly funded. This is an uncertain time for the development of local healthwatch, with local authorities beginning to tender for hosting healthwatch organisations. Moreover, in Surrey, Sutton LINk, for example, has been selected as a pathfinder HealthWatch but is rightly concerned at how realistic it is to take on a new role and the increased costs of undertaking new duties such as the complaints advocacy without any form of transition or improved funding. Will the Government reconsider their decision not to fund pathfinder LINks healthwatch organisations to enable an effective transition to HealthWatch?
	We should recognise the widespread concern raised by current LINks organisations that the healthwatch arrangements make them dependent on the local authority for funding. With local authorities' greater involvement in healthcare, particularly for public health, how will healthwatch organisations be able to exercise independence and have public confidence and trust in their role? I look forward to the Minister's response on these key transition issues.

Lord Harris of Haringey: My Lords, I apologise to my noble friend Lord Patel if he in any sense felt beaten up by me. I absolve my noble friend Lady Wheeler from any involvement in that process. I also apologise to the long-suffering officials in the Government Whips Office. If my robust style is mistaken, they should really see what I am like when I am angry.
	I added my name to a number of amendments in the various versions of this group. I also proposed Amendment 305. If the noble Baroness whom I believe is replying to this debate is planning to highlight any technical flaws in that amendment, I should point out that I drafted it myself. Therefore, it no doubt does contain a number of technical flaws. But the purpose of the amendment is to assess the feeling within the House and the strength of feeling in the department about the extent to which it is important that HealthWatch England and healthwatch organisations at local level should be independent.
	The principle underlying this group of amendments is straightforward-the centrality of the voices of patients and users in the NHS. That voice must be, and must be seen to be, independent of the various provider and regulatory interests. That is what underpins all of the different amendments.
	I find it difficult to understand how the Government will oppose the amendments. They keep telling us that the voice of the patient and the user will be central to all these arrangements. They say that that is their intention. But they must be aware, because everybody else is, of the cynicism and doubt that is being expressed around the country about this whole package of NHS changes. Therefore, they should be able to reassure patients and users that their voices will be heard at every level within this complicated restructuring that will take place. That is extremely important.
	What is more, it will be important for that voice to be seen to be independent. Members of the public will be concerned about what is happening. They will worry whether their doctors, who that they do not fully understand as being part of commissioning groups, will somehow be making judgments about their care, influenced by financial interests. They will want to be assured that they can go somewhere for proper advice and support, and that that place will genuinely be independent of all of those interests.
	A huge expectation is now being placed on local healthwatch organisations. They are expected to provide that independent advice and information, to be able to monitor the nature of the service at local level and to be able to comment on the various changes that are taking place and on the proposals that are coming from the plethora of commissioning groups, senates and goodness knows what else we are going to have. They are going to be there to make recommendations. So, there will be enormous expectations on behalf of the public as to what these groups are going to do. Similarly, the national body, HealthWatch England, will have enormous expectations upon it. That is why it is so important to get these arrangements right. The proposals for HealthWatch England and local healthwatch are an advance on what we have at present in terms of LINks. There is no question about that-they are a step forward. The record of successive Ministers and Governments in terms of patient representation in the NHS is not very good. This is a step forward from where we are at the moment. So, let us try to get it right. Why not deal with what are comparatively small issues in terms of how the system works?
	The trouble is that, at the moment, the arrangements that the Government are proposing are flawed in two key respects: first, on the issue of independence, as the noble Lord, Lord Patel, has already indicated; and secondly, in terms of the resources available. Let us consider for a moment the position of HealthWatch England as a sub-committee of the Care Quality Commission. That might be a very neat way of not increasing the number of quangos by one; it may be that was the sole motivating feature. However, the reality is that it dangerously compromises the independence that I talked about as being so important. Often, HealthWatch England will have to say, on behalf of local healthwatch organisations, that the regulator should be doing something, has failed to do something or has been inadequate in the way that it has done that. In the last few weeks, we have seen the Minister's colleagues in the Department of Health making quite critical comments about the way in which the CQC has fulfilled its remit. If Ministers are saying that-and Ministers are, after all, the paymasters of the CQC-what is it going to be like for those people whose remit is to raise these issues but are themselves subordinate to that regulatory body? It is going to be a real conflict and a very difficult position for them. The nature of that relationship-the fact that they are a mere sub-committee and are subjected to all of the panoply of arrangements that go with that-is going to be seriously limiting.
	I am aware that the CQC is making enormous efforts to try and demonstrate their good faith in all of this. I am sure that the individuals involved have good faith as far as this is concerned. However, we are here considering legislation that will set those arrangements. Once those arrangements are set, the good will of the individuals who may be trying to make it work at the moment may not persist-not because those individuals will change their minds, but because, over time, those individuals will move on and others will take their place. Budgetary and other pressures on the CQC will rise. The feeling that they do not like being criticised by a body that is technically subordinate to them will increase. That is why that arrangement does not work.
	There is an even stronger argument as to why local healthwatch organisations should not be subordinate to principal local authorities in their area. The Government's flaws here are flaws twice over. Not only are they imperilling the independence of local healthwatch organisations by saying that-even though they are supposed to be independent-they are creatures of the local authority, the funds will be provided by the local authority and many of the facilities may well be provided by local authority but, because the funds will not be ring-fenced, it will be far too easy for local authorities to start to apply the screws if they do not like the criticisms that come from it.
	A major conflict of interest is being created. HealthWatch cannot be accountable to, and at the same time funded by, local authorities because the bodies which commission and provide the services are the local authorities in many instances. However, the Government are saying that HealthWatch can advise members of the public about those services. How can HealthWatch organisations be funded by the same bodies that are commissioning and providing those services? This is precisely the area where the confidence of members of the public and of individual patients is so important. They have to go for advice to a body which is funded by the people about whom they wish to take advice. That hardly looks independent or satisfactory. If HealthWatch is made accountable to local authorities as the Bill proposes, the public will, frankly, have no confidence in that and all the efforts that the Department of Health and the Government have made to try to create a better structure will be wasted. That resource will be wasted because the public will not have confidence in these arrangements.
	There is also a failure to protect the funding. I do not know how many hot coals Ministers in the Department of Health had to crawl over to get £60 million out of the Treasury for HealthWatch. I am not suggesting that the Department for Communities and Local Government is any more evil than any other government department, but if you hand the funding to that department, which then hands it on to individual local authorities without a label saying, "Not only is this money to be used for HealthWatch but it cannot be used for anything else", my experience as a former council leader tells me that you cannot guarantee that the money will be used for the purpose that you wish.
	I spoke earlier about localism and said how wonderful it was that the Government should devolve responsibility for this issue. However, it is not a wonderful example of localism if you expect something to happen, you pass the money on and then you are shocked if the money is not used for that purpose. If you want the money to be used for a particular purpose, you have to label it and ring-fence it. However, the Government will not do that. They say that they cannot do that as it would be inappropriate in the spirit of localism.
	I have received numerous e-mails and messages from LINks on this very subject. Their experience of not having ring-fenced budgets this year is salutary. One message states:
	"As a LINk our funding was reduced by the local authority by 65 per cent this year".
	Another states:
	"I have spent 30 years as a senior business professional and business consultant and it is ludicrous to set an organisation targets to be funded by set criteria and then reduce those funds by 65 per cent. This makes a mockery of the organisation's ability to carry out its public remit".
	That is what is happening at the moment. What guarantees can the Government give that it will not happen in the future?
	There is a technical point here. The Department of Health has presumably secured these funds through the comprehensive spending review. Who will own those funds the next time that the comprehensive spending review is negotiated? Will it be the Department of Health or the Department for Communities and Local Government? If it is the Department for Communities and Local Government, how will it rank given its other priorities which have nothing to do with HealthWatch? If it is the Department of Health, how will it answer the question from the Treasury, "How do you know that this money is being spent in the way that you intend?". It will not be able to answer that question, as I suspect that the correct answer is that the money will disappear. LINks already have huge concerns about the resources question.
	The other element of this concerns what sort of patient representative mechanism we want. Do we want something which is top-down or something which comes from local organisations? The amendment that stands in my name seeks to establish an arrangement whereby local healthwatch organisations have ownership of the national body which speaks in their name. I believe that that is essential. Even if you created HealthWatch England as an independent structure without the problems of it being a tool of the regulator, you will still not get the necessary buy-in at local level unless local organisations feel that they are part of it and have a say in its organisation. I speak as someone who was director of the Association of Community Health Councils for England and Wales for 12 years, and I know how important it was for the member organisations to feel that what we were saying as the national body reflected-not to the letter, but reflected-what they felt was important as local organisations. If you do not have that mechanism, if you do not have that process built into the legislation, I am afraid that you will create a gulf between the national body and the local bodies. That is surely unsatisfactory.
	The Government's proposals could make an enormous difference to patient representation in the new NHS, and patient representation is going to be enormously important in the new structure, because I think that many patients will feel disempowered and worried by what is happening. However, those arrangements are flawed unless the Government accept the spirit of the amendments in this group-and unless they accept that HealthWatch, both nationally and locally, should be independent, and that resources should be clearly ring-fenced and clearly identified and cannot be used by bodies that have no interest, necessarily, in patient representation used for other purposes.

Lord Warner: My Lords, I have added my name to Amendment 99 and to a number of other amendments tabled by the noble Lord, Lord Patel, and my noble friend Lord Harris. I do not want to speak for very long on this issue. I have some inhibition about speaking about this because I do not think that my own party's record on patient representation was extremely startling. I had to take some of those measures through your Lordships' House and usually did not get the better of the arguments with the noble Earl on these issues. I accept that the Government have started off pretty well on this issue and that they have a good brand-HealthWatch is quite a good brand. I am an athletics fan, however, and the Government are beginning to look like a 200-metre runner who has moved up to 400 metres but is now starting to run out of steam on this issue in the last 100 metres. What I think has happened is that the money has started to dominate the discussion.
	I also recognise here a favourite Department of Health word-hosting. There are two phrases that used to worry me as a Health Minister: "the NHS family", which was usually an excuse for doing something foolish; and "hosting". The danger of hosting is that, for what seemed to be perfectly good reasons, you put one organisation in the maw of another organisation whose culture is fundamentally different from the needs of the organisation being hosted. The real danger here is that there is no obvious similarity between a regulator and a patient representative organisation.
	I will give the noble Earl just one example where the Government would do well to pause and think. If you are the parent of someone with a learning disability who is in a home which has mistreated and abused them and the regulator has let you down, or you perceive that the regulator has let you down, you are not going to be very pleased to find that the regulator is the very same body that is hosting the national body representing patients. That is a real example, not a phoney example. I think that there could be many such cases-and we will have a debate on Dilnot and social care on Thursday. However, there are some serious problems in the funding and quality of some of our social care institutions. The regulator is going to have a tough time in these areas over the coming years. It is a mistake for HealthWatch England to be hosted, in effect, by the regulator. Given the size of the NHS budget, the Government are spoiling their ship for a ha'porth of tar, to use a corny phrase, by not finding the money to fund this body adequately, so that it can stand on its own two feet and be secure and independent, and so that it can be allowed to be seen to be secure and independent by the patients who will put their trust in it.
	I shall end on the point made by the noble Lord, Lord Harris, about ring-fencing. I can give the noble Earl a good example of where the Government have tried to do the right thing. They tried to put some extra money into social care that would go down to local authorities to improve the volume and quality of social care, but they did not ring-fence it. It was the best part of £1 billion, out of the £2 billion increase in social care funding. We now have a lot of people who thought that that was a jolly good idea. However, as it was not ring-fenced, the Government will not get any credit for it. It has gone into local budgets, but we do not know where. If you talk to any director of adult social services they will tell you that one of the problems was that the money was not ring-fenced, so they cannot reassure the Government that the money has gone to the purposes for which the Government sent it down the conduit to the local authorities. There is a very real danger that the same will happen with the HealthWatch money that will go down to the local level. I strongly support these amendments.

Baroness Masham of Ilton: My Lords, I spoke on this subject at Second Reading, and I want to go back in history for a few minutes. I remember that when the community health councils were closed down, the noble Earl, Lord Howe, and I felt strongly that the health forums which were put in their place should be independent. If a local healthwatch organisation is linked too closely to its local authority, it will be difficult for it to be able to speak out if it finds that both health and social care facilities are not up to scratch. What happens if they disagree with the CQC? Patients often need help, so an independent body would be much better to help them with their problems. It is vital that HealthWatch is adequately funded to do a useful job, otherwise it will fail. Perhaps I may give an example concerning a rural area. What happens if there are not adequate funds for the payment of members' travel expenses? That has been found with the local LINks. I hope that the Minister will give this serious consideration.

Baroness Cumberlege: My Lords, I have listened to the debate, and some powerful arguments have been put forward for an independent HealthWatch England. However, I am not sure that that is the right answer. The noble Lord, Lord Harris, said that he feels that the Bill is setting up the new arrangements, and of course he is right. However, when one is setting up new arrangements, it is a good idea to look at what has happened in the past. Looking back to the confederation of CHCs, one sees that it never actually made an impact. I think that that was probably because the initiative for setting up that body came from the CHCs themselves, and so the confederation had no formal legitimacy, no clout and few resources.

Lord Harris of Haringey: I would not disagree with the point about the resources, but the initiative to set up the association-not a confederation-came from the noble Lord, Lord Owen, who was Minister of Health. He announced, in what he assumed would be a very positive fashion, that he wanted to see a national Association of Community Health Councils. However, as he had not spoken to community health councils first, they felt considerable dismay about the setting-up of a national association at the behest of a Minister. The resolution to support the creation of the association was carried-I cannot remember the precise figures-by something like only 107 to 93. I am afraid that the noble Baroness's argument is flawed.

Baroness Cumberlege: My Lords, I am very grateful to the noble Lord, Lord Harris, for his history lesson. Perhaps I should not go on to the Commission for Patient and Public Involvement in Health. Perhaps he remembers that organisation, which never quite worked. I think that it did its best, but it failed to influence the Labour Government of the time. Perhaps it was a bit too strident. Maybe it was not canny enough. Maybe it did not build the relationships that are so critical when one is negotiating a change, especially with a big beast like a Government. Of course, the Labour Government closed that one down very hurriedly.
	The proposal in the Bill is that HealthWatch England should be a committee of the CQC, as has already been said. There are advantages in that, provided that there are some safeguards in the way that it works. My three amendments seek to achieve those safeguards.
	There are advantages in being at the top table, knowing what is going on, and building the necessary relationships to influence policy and practice. The CQC will, of course, have the resources to collect and analyse data on a national scale. Provided that it shares that data generously-and it must do so-it will enable HealthWatch England not to have to build its own infrastructure in order to operate effectively. That will also enable HealthWatch England to have a strategic role in shaping the new NHS. It is very important that it should not just be a sounding board for local issues, but should have a strategic vision as well. The CQC will of course learn of the issues that need addressing through the real experiences of patients, through HealthWatch England, which will be at the table.
	We have to understand what both organisations bring to the party. The CQC is the regulator. Its duty is governed by the statutory standards for healthcare and it has the indicators to measure them, as set out in the Health and Social Care Act 2008. HealthWatch England brings something different: the priorities, the experiences and the views of patients and the public, through local healthwatch organisations. Played right, this combination could be very powerful. It could deliver the accountability that reflects both the priorities of government, derived from the democratic process, which I think of as the theory, and the actual experience of those who depend on health and social services during what may be the most vulnerable time in their lives, which is the reality.
	If this combined perspective, to be embedded in regulation, is to work well, it is essential that HealthWatch cannot be dictated to or steered by the CQC. It must speak with a clear, strong, independent voice. This requires two things: first, the appropriate balance of membership within HealthWatch England; and, secondly, the appropriate status for its advice within the functions of the CQC. The status of HealthWatch England as a committee of the CQC may be quite pleasing in its value for money and its legislative simplicity, but it does not guarantee that clear, strong and independent voice. This is the voice of the victims who have been so badly let down by the NHS. It is the voice that has been chronicled so meticulously in the first Francis report on the mid-Staffordshire scandal, the Bristol inquiry, and other reports.
	Therefore, my first amendment, Amendment 307A, ensures that the majority of the members of HealthWatch England are not also members of the CQC. This avoids the advice of HealthWatch England being biased through corporate responsibility with the CQC. My second amendment, Amendment 308A, ensures that the majority of the membership of HealthWatch England is elected from the members of local healthwatch organisations. This permits the introduction through regulation of provisions to ensure that elections cover local healthwatch organisations from across the country, and that representatives are elected through due process for an appropriate term and with appropriate accountability. We know that this works very well. We have seen regional elections to national bodies in the voluntary sector and even outside it, from student unions, to national professional associations, to the National Association of Citizens Advice Bureaux. The National Association of LINks Members recently conducted elections from its regions which were overseen externally and the process proved to be satisfactory.
	My Amendment 308B places an obligation on the CQC to have due regard to the advice given to it by HealthWatch England in all its functions. This advice will have equal status to that of the CQC's current advisory committee established by the 2008 Act. If HealthWatch England is to have any teeth, it would be illogical for it to have lesser status. Due regard means that the CQC must demonstrate how it has incorporated the advice of HealthWatch England into its conclusions and actions, embedding reality into the way it applies theory.
	This will open the way for HealthWatch England to comment in its report on whether the CQC has taken note of its advice, as required by new Section 45B. New Section 45A(6) only requires the CQC to respond to advice from HealthWatch England and not take any account of the way it goes about its business of regulating health and social care. This is inadequate and does not incorporate the voice of patients and the public in regulation.
	Finally, I say that we should learn from past disasters and failures in the NHS. A powerful lesson from the Bristol inquiry was how important it is to involve patients and the public. Recommendation 160 from the inquiry stated:
	"The public's involvement in the NHS should particularly be focused on the development and planning of healthcare services and on the operation and delivery of healthcare services, including the regulation of safety and quality, the competence of healthcare professionals, and the protection of vulnerable groups".
	I would not be surprised if the second Francis inquiry states something similar. Of course, I do not know what it will say-this is just a supposition on my part. It would be good for the Government to show that they are ahead on this and that they understand the importance of these issues and are taking action through mending the Bill. If my noble friend Lady Northover is not totally convinced by my amendments-I hope that she will be, but probably she will not-perhaps she will take them away and at least give them serious thought, because I think they have merit. They will give HealthWatch England a sound basis on which to maintain some independence while still being in the tent and therefore in a strong position to influence the CQC and secure continuous improvement in the provision of healthcare.

Lord Whitty: My Lords, I, too, tabled amendments in this group. They are aimed at providing HealthWatch with the independence and resources that it requires to genuinely represent the patients and users of health and social care services. Many noble Lords will understand that I am not a health service expert. However, when the White Paper proposing these changes came out, I still had some responsibility for consumer affairs generally as chair of Consumer Focus. Health service professionals do not like to regard their patients as consumers-I am quite happy to call them patients, users or clients-but we are moving the users of health services to a situation closer to that of consumers in other markets.
	If we do not have separate consumer representation that reflects at both local and national level the concerns and interests of those consumers, we will not improve the service in the interests of users and patients. The noble Baroness, Lady Cumberlege, tabled amendments to strengthen the position of the regulator that go a considerable way towards making sure that there is some recognition of independence. However, the role of patient representation is entirely different from that of the regulator. Inevitably there will be conflict.
	I turn to other sectors. When I was the Minister responsible, we took the Consumer Council for Water out of Ofwat because there was a conflict. We took out Passenger Focus from what became the Office of Rail Regulation because there was a conflict. We always kept Energywatch and then Consumer Focus separate from Ofgem. There was tension in all those areas, but that tension is more easily resolved if there is independence, ring-fenced funding and an ability to relate directly to the consumers of those sectors independently of the regulator. There is not a huge amount of difference in the health service, although obviously there are some esoteric aspects to it. The question of price and the exchange of money at the point of service does not arise in the same way, but questions about much of the rest of customer service absolutely do arise. Indeed, the main complaints about the health service are related to customer service and are almost equivalent to those made in many private and public sector markets.
	I do not accept that a role within a regulator is sufficient to represent the interests of patients and users. Many of the propositions that are before noble Lords are worthy of the Government's consideration. My own proposals are based very much on the construction of Consumer Focus, and in that sense they are not my own work but the work of the parliamentary counsel at the time. They are in no way superior to my noble friend Lord Harris's jottings. If we were to look at them all together I am sure that those of us who are arguing for independence could come up with a clear alternative, but it would be much better if the Government themselves recognised the strength of argument in this area and came up with their own proposition between now and Report. They need to make it fit with the total pattern. The Government are the only people who can make a commitment to resources and to genuine independence. After the strength of argument that has come up in this debate, and with the views from LINks and from some of the patient organisations for particular conditions and diseases that the present proposals inadequately reflect, I hope that the Government will think again.
	My last point is that, in addition to independence and to separate and clear resources free from the provider and the regulator, the Government need to look at powers, because a genuinely effective consumer, user and patient organisation that does not have the power to request from the providers, and in this case the commissioners, information on how they are conducting their affairs is always at a disadvantage. In other sectors there are clear powers for the consumer organisation. In this sector I am sure that those powers are also necessary for the whole range of bodies which the new configuration of the health service will have as a result of this Bill.
	I hope that the Government think about this debate and come up with their own proposals. In the mean time I support the noble Lord, Lord Patel, and others who have spoken in the debate.

Lord Walton of Detchant: I have a short but, I believe, relevant question for the Minister. As he is aware, a medical charity called HealthWatch has existed for some years. I have the honour to be a patron of it. Every quarter it produces incisive commentaries on health matters that are not always totally in line with government policy. Has the department been able to work out some kind of mechanism by which any potential confusion in the public mind between the charity and this body, which is to be created under this Bill, can be avoided?

Baroness Masham of Ilton: My Lords, I want to ask the noble Baroness, Lady Cumberlege, about her safeguarding amendments, which are very interesting. Would she not also put down a safeguarding amendment about the funds? Jobs will not be able to be done unless funds are safeguarded.

Baroness Cumberlege: I will think about that. Having dealt with the Treasury in the past, I know how difficult it is to get anything ring-fenced. However, the noble Baroness's suggestion is very interesting and I will take it on board.
	We have examples of other consumer groups being very effective within their parent organisation. I think in particular of NICE, which has done a lot to get views on its work from the general public. The Council for Healthcare Regulatory Excellence has also done that.

Lord Harris of Haringey: I am sorry to intervene again on the noble Baroness, Lady Cumberlege. It is probably because we know each other too well that I feel able to interrupt at regular intervals. The examples she has just cited are examples of bodies that are there specifically to advise the organisation concerned. The consumer panels that NICE set up are about advising NICE about particular issues in terms of clinical effectiveness and what patients in that area are concerned about. They are not representing patients more generally and they are certainly not representing patients in terms of the statutory obligations of NICE and where there might be a disagreement about what NICE is doing. They are there to inform. That is the distinction.

Lord Patel: In response to the amount of funding, as I understand it-I am sure the noble Baroness, Lady Northover, will correct me if I am wrong-the Bill suggests that the funding for HealthWatch England will be a grant in aid provided by the department to the CQC.

Baroness Jolly: My Lords, they say that too many cooks spoil the broth, but I think this is an occasion where that probably has not happened. Many hands might make light work. I ask the Minister to take these amendments away because there is an awful lot of good to be found in each of them, but not in each together, as it were.
	Amendment 318C, tabled by the noble Lord, Lord Whitty, inserts a new clause and subsection (2)(a) of the new clause is about complaints. It is a nice idea that complaints could be taken to HealthWatch England. Complaints are a big issue to which we will be returning on Amendment 108.
	The noble Baroness, Lady Cumberlege, raised the relationship between local and national healthwatches. It is critical. We would support the election of local healthwatch representatives to the national body.
	Finally, on independence and finance, I believe very strongly that it is very difficult to criticise and challenge an organisation if you sit within it. I understand the point about the benefits, but if you are local, and you sit within your local health authority or nationally you sit within the CQC, generally the feeling that you are monitoring the organisation that is your host is never a good place to start. Similarly, I, too, have had letters from people who were CHIPs and then LINks about budgets being not just cut a little bit but absolutely hacked away. I would be really uncomfortable if, for example, locally the healthwatch was going to be located within the principal local authority that held the budget. We have had it already today. Intentions will be good and then somebody will come along and say, "We really need a bit more just for this". It will happen in a meeting where they are not present and, all of a sudden, there will be another slice taken. We have seen it before with lots of other things. You could look at it from a negative point of view and say these are like curate's eggs and bad in parts or good in parts, but I think too many cooks will not spoil this broth. Many hands will make light work. I ask my noble friend to take this away and have a look at it.

Baroness Northover: My Lords, I sympathise with the noble Lord, Lord Patel. He is forgiven for being subject to the beatings of the noble Lord, Lord Harris. When I made my maiden speech, the noble Lord, Lord Harris, gave me a very interesting and less than usual tribute. Noble Lords will see that we have a slight history.

Lord Harris of Haringey: The noble Baroness stood against me.

Baroness Northover: As the noble Lord points out, I stood against him as a paper candidate-a non-serious candidate. When I went up to congratulate him on winning by about 2,000 votes to my 20 or whatever it was, I was given a blasting in relation to the successful campaign of one of my colleagues. That apart, I have great respect for the noble Lord, Lord Harris, and I am very happy to discuss these amendments wherever they come in the Bill. However, I would point out that these amendments are about HealthWatch England and we will return to local healthwatch organisations later on. I gather that the noble Lord, Lord Harris, will not be here at that point so has flagged up some issues which I hope to be able to address. But noble Lords may wish to be aware that we will be coming back to this in relation to the local aspects.
	This has been yet another high-quality debate and a range of different perspectives have been expressed. One of the things that has come through is the concern about trying to make sure that the NHS is genuinely patient-centred. All too often, patients are expected to fit around services, rather than the other way around, and that is what we are seeking to tackle here. Years back, I was a very junior spokesperson on health for the Lib Dems and then I moved to international development. I remember the debates on this issue, in particular on the National Health Service Reform and Health Care Professions Bill in 2002. It is one of the things that I asked about when seeking a briefing. Various noble Lords have referred to what has happened over the years. I was interested in what the noble Lord, Lord Hunt, said in 2002 when he put forward proposals to involve patients. After they had gone back and forth and around and about and there had been much discussion, he described his position as being,
	"as good as it gets".-[Official Report, 13/6/02; col. 419.]
	The noble Lord, Lord Harris, said that they now had a system,
	"which will act robustly in the interests of the public and patients".-[Official Report, 13/6/02; col. 430.]
	I very much welcome the fact that the noble Lord, Lord Harris, recognises that we are trying to improve on things.

Lord Harris of Haringey: It went down before it went up.

Baroness Northover: Then there were the patient forums of 2004. The noble Lord, Lord Warner, said that these were,
	"the cornerstone of the arrangements we have put in place to create opportunities for patients and the public to influence health services".-[Official Report, 5/7/04; col. 516.]
	In 2007, we moved on to LINks. We have abandoned the commission that was at the centre-the noble Baroness, Lady Cumberlege, referred to this-because it was centralising, bureaucratic and absorbed money that was supposed to be devolved. I have the Health Select Committee report criticising that commission.
	As others have said, there is a history of trying to move this forward and trying to ensure that there is better patient and public involvement. I welcome what various noble Lords have said about the improvements in the Bill. We are trying to learn from that history and move it on, although I hear what people say that we possibly have not got it as far as they people wish.
	The Government are seeking a fundamental shift. The aim of HealthWatch England is to help orientate the NHS first and foremost around the patient. Healthwatch, at both local and national levels, aims to strengthen the ability of service users and other members of the public to shape and improve health and social care. The role that Healthwatch England will play is crucial. Its aim is to provide leadership, support and advice to local healthwatch organisations and to make them more effective. I looked at the LINks reports and although they are welcome, anyone can see that there is much more that can be done. They do not reflect the whole range of patient voices and the kind of responsiveness you might wish to see in the health service, which is why it is such a challenge.
	HealthWatch England will also provide information and advice about the views of patients, the public and local healthwatch to the key players in the NHS and social care-the Secretary for State, the NHS Commissioning Board, Monitor, English local authorities and the Care Quality Commission. At present there is no statutory body with either of these roles. Therefore, I am sure we can all agree that this represents a step forward. As noble Lords have said, the HealthWatch England committee will be a committee of the CQC, with a chair who we intend will be a non-executive director of the CQC. Part of this debate has focused on whether this is the appropriate organisational form for HealthWatch England: whether, in this form, it can sufficiently and independently serve the interests of patients and the public and whether it will have the status it needs to achieve this. I have listened to these concerns and I fully agree that this area is too important to get wrong. We are interested in change that works and this Government believe that setting up HealthWatch England within the CQC is the best way to achieve this aim.
	I shall explain the reasoning behind this. First, there are key synergies to exploit here. To be effective, HealthWatch England is going to need extensive capabilities which the commission that existed before clearly did not have. It will need clout, which clearly that commission did not have. Being part of the CQC will enable it to have both of these. HealthWatch England will be able to draw on the infrastructure and support from the CQC to deliver its work to a high standard. It will have easy access to the CQC's information sources, which have been referred to, enabling it to develop a deeper understanding of how health and social care organisations are functioning or where there are problems where the views of people may have made a difference. Being part of one of the big national bodies will, we hope, give HealthWatch England a real profile, and one we feel would be hard to generate if it was a new, separate body-and there is the history that we know about. Operating from within the CQC should enable HealthWatch England to punch considerably above its weight.
	Secondly, it will enable the voice of patients to have a real influence on the regulatory work of the CQC. Close working and communication between HealthWatch England and the CQC opens up the possibility of having the patient voice hardwired into the work of the commission. It is not just a matter of looking at HealthWatch England but seeking to ensure that it really has a positive effect.

Lord Warner: Can the Minister give the House any information that the department has on the name recognition of the Care Quality Commission which would deliver the kind of profile for HealthWatch that she is claiming for it?

Baroness Northover: The noble Lord, Lord Warner, is very concerned that HealthWatch itself is a name that is going to be far too easily recognised and obliterate his charity. This is HealthWatch. The fact that it is in that relationship with the CQC does not obviate that. I would turn it back to the noble Lord and ask him who might recognise any of those predecessor organisations over the past 10 years and whether there was ever wide recognition of those.

Lord Warner: That was not my question. The noble Baroness is arguing that HealthWatch would actually benefit from being hosted by or being part of the Care Quality Commission because it would be a powerful national body. I was asking the noble Baroness what the name recognition of that powerful national body was that would produce benefits for HealthWatch.

Baroness Northover: At the moment the CQC is relatively well known because its reports are in the press fairly frequently. The reports of the investigations that it has been undertaking have caused considerable concern. I cannot give the noble Lord a scientific response based upon polling as to the recognition of the CQC, but I would guess that it is somewhat higher than some of the organisations representing the patient voice that have been there before. When patients went into hospital and had concerns about various things, did those organisations spring to the forefront of their minds? Possibly not.

Baroness Morgan of Drefelin: I too have listened to this extremely important debate with a great deal of interest. I am slightly losing the thread of the Minister's argument. When the Minister started she was saying that the debate was about how we put patients at the centre of the NHS. However, I think that the debate has been about whether or not HealthWatch England should be independent. What the Minister is saying is very interesting, and I do not want to interrupt her for too long. I want to understand what the benefits to HealthWatch England are of being enclosed within or subordinate to another organisation. If we want to have a HealthWatch England that is out there punching above its weight and really taking patient interests to the Secretary of State and the Commissioning Board, it would seem to have a much better opportunity to be heard, recognised and understood as an independent organisation that is not subordinate. Why do the Government think it is better to wrap it up inside another organisation which is very different in character, and make it dependent and subordinate to that organisation? How will that help it to fulfil its objective?

Baroness Northover: I am sorry that I am not putting this clearly. One of the major points about this is for HealthWatch England to be in a place where it can have a direct effect upon organisations like the CQC. We know from history that even when you have a national organisation, it does not necessarily mean that it has the effect that one would wish; the noble Baroness will know that all too well. Various parts of this organisation have various obligations built in to listen to HealthWatch, which we hope will help, but because it is there as part of CQC there is an obvious relationship, because CQC is the organisation that goes in and regulates the institutions that deliver care. The CQC regulates; the various institutions and other bodies provide the care. HealthWatch England is trying to draw out the patient's voice in this, and make sure that it is heard loud and clear.
	Fancy this; I have just been given a quote from the chief executive of National Voices, Jeremy Taylor, who says that he is,
	"not sure that it matters where HealthWatch England sits. What matters is whether it has clout, credibility, independence and sufficient resources. One could have a big debate about whether it should sit as a separate body or as part of the CQC. Colleagues may have different views. My view and the view expressed in the forum is that HealthWatch England will be an important part of the architecture for the patient voice, so we should welcome it."--[Official Report, Commons, Health and Social Care Bill Committee, 28/6/11; col. 67.]

Baroness Emerton: My Lords, we have referred to "patients" all the time, and I understood that HealthWatch was going to be public and patients. The Care Quality Commission looks at complaints. There is a culture issue here. The independence of HealthWatch is vital, because we are talking about the future as well as the present. My experience over the years, when we have been looking at new services, is to have the public and patient representation coming forward with ideas-it should not be governed by a health authority or anyone else, but be independent-and reporting back to the body that asks the question. We are going a little off-beam in terms of the Care Quality Commission, which would be culturally oppressive to any organisation that is set up to look to the future.

Baroness Northover: The noble Baroness is quite right that this is patients and public. One of our concerns about some of these amendments which refer only to patients is because the whole of the public are potentially patients, or related to or caring for patients and so on. It therefore does have to be defined widely, and she is right that we are looking to the future. I am not sure that I would share her view as to the CQC, which indeed needs to help play its part in driving up quality, which underpins much in the Bill.
	Maybe I can carry on and address some of the specific points raised by noble Lords. The Bill preserves a clear distinction between the CQC and HealthWatch England. Although HealthWatch England will be established as a statutory committee of the CQC, it will be solely responsible for setting the direction of its own work and exercising particular functions. This will ensure that HealthWatch England targets issues and gathers evidence from the public to base its national advice on service standards and improvements. HealthWatch England will maintain its independent role by presenting the collective patient and public voice to the Secretary of State and to the relevant bodies.
	After listening to the concerns raised about the importance of reinforcing the distinction between the roles of the CQC and HealthWatch England, the Government made an amendment to the Bill in the other place that requires the CQC to respond in writing to the advice it receives from HealthWatch England. Similarly, HealthWatch England must publish a report on the way it has exercised its functions during the year and lay a copy before Parliament. This will be a distinct report by-and the responsibility of- HealthWatch England, as opposed to the general CQC report.
	The noble Lord, Lord Patel, suggested that local healthwatch would have no direct influence on CCGs. Let me see if I can answer some of those issues which have been raised in relation to local healthwatch. I cannot agree that this is a fair representation. Local healthwatch will have the function of making known the views of people and making reports and recommendations for service improvements to commissioners of local care services, among others. This is set out in Clause 180, which amends Section 221 of the Local Government and Public Involvement in Health Act 2007.
	The noble Lord also suggested that HealthWatch England should have regional arms. I cannot agree with him that this would be a good course of action. We want to see resources, wherever possible, channelled to the front line. One of the criticisms of the short-lived Commission for Patient and Public Involvement, which I have referred to before, was that this was too bureaucratic and its regional arms soaked up too many resources. We feel that having both a local and a national tier is sufficient. The noble Lord, Lord Patel, also asked about research. Local healthwatch will gather and present the views and experiences of local people to make reports and recommendations, and as part of this it may need to carry out studies. However, we have to remember that it is not primarily a research organisation. We have to emphasise that it is a champion of patients at local level.

Lord Patel: I did not have in mind the scientific meaning of "research". This is research of what is going on in individual hospitals. I use the example of Mid Staffordshire, where it was the research following initial incidents that made everybody aware of the extent to which bad practices were going on. That is the kind of research that local healthwatch should be involved in.

Baroness Northover: I take on board what the noble Lord says, and indeed he is absolutely right. There are various ways in which such problems should be picked up, but it is exceedingly important that that happens, and we certainly hope that local healthwatch will be part of that.
	The noble Baroness, Lady Wheeler, talked about engagement with stakeholders. I can assure her that there is ongoing engagement with stakeholders through a HealthWatch advisory group. The National Association of LINks Members and others are members of this group, and there are others. The noble Baroness also asked about the funding for transition. The Government continue to make funding available to LINks- £27 million during the transition-and as part of the HealthWatch development programme we will make £3.2 million available for start-up costs for local healthwatch organisations.
	The noble Lord, Lord Harris, asked about conflicts between the CQC and HealthWatch England. We disagree that the Bill does not already provide sufficient safeguards to ensure the independence of HealthWatch England within the CQC. Obviously, in extreme cases, the Secretary of State has the ability to intervene if HealthWatch England is significantly failing. However, both the CQC and HealthWatch England have responsibilities that they must deliver.
	The noble Lord also spoke about the relationship between LINks and local authorities, and expressed some concern about that. LINks have been funded by the local authorities and it is right that so too will the local healthwatch. The relationship of local health authorities and LINks overall has been a successful one-although I take the point that he makes-that has encouraged collaborative working between LINk and the local authority. The Government believe that if local healthwatch organisations are to play a full part in their local communities, it is appropriate for them to be accountable to directly elected local bodies that are better able to assess the needs of the local population. It would not be appropriate for them to be funded nationally, but I hear what the noble Lord said.
	My noble friend Lady Cumberlege spoke strongly in support of many of these developments from her knowledge of the history of the past few years. She showed how we are trying to build on the experience of previous Governments to take this forward. However, she will not be surprised to know that I have some concerns about some of her amendments. Her Amendments 307A and 308A would prescribe certain aspects of the membership of the HealthWatch England committee. For example, Amendment 307A proposes that:
	"The majority of the members of the Healthwatch England committee shall not be members of the Commission".
	The debate that we have just had illustrates why this is important. Certainly, we have sympathy with that point of view. However, we do not think that it should be in the Bill. It is best to put these in regulations, which would enable flexibility. Clearly, rules about the membership and procedure need to be consulted on and that will be taken forward when we engage over those regulations.
	I told myself that we would write to the noble Lord, Lord Walton, about his organisation. However, it turns out that I am aware of a number of other organisations that use the name HealthWatch. The Government's proposals mean that the HealthWatch we envisage will be unique as the champion of the patient and the public voice. I am not sure whether that totally answers the concern of the noble Lord, Lord Walton. Perhaps I had better write to him after all.
	My noble friend Lady Jolly flagged up concerns about complaints. Perhaps I may reiterate that HealthWatch England's role is that of a national champion of the consumer voice. Its purpose will be to bring that voice to the attention of regulators and others. Giving HealthWatch England powers of investigation of complaints could compromise its primary role in that regard. One of the developments introduced by the previous Government was to bring in a statutory framework for an investigation of NHS and adult social care complaints. It remains the Government's view that complaints are best dealt with in the existing framework and initially at the local level. This provides a better opportunity for local organisations to learn from their mistakes and to improve services as a result. Where resolution is not possible locally a complainant is able to complain further to the Health Service Commissioner, the ombudsman or the local government ombudsman, as appropriate. The ombudsman's functions of investigation are statutory. Therefore, we see no reason to duplicate. The structure set in place by the previous Government will stay in place and acts in that way.
	As ever in this House there is a wide range of experience, particularly perhaps in this instance on what has not worked in the past. It is a great challenge to enlist patients and the public in making sure that standards are driven up. We believe that devolving to the local level with clinicians and patients more in the driving seat should help. I welcome the support of noble Lords who feel that these changes are a move forward, but I hear them when they say that there are areas that still need to be addressed. For that reason, we would certainly like to continue discussions with those who wish to feed in on this issue in order to make it as good as we can: namely, a system that more effectively brings to bear the voice of patients and the public, which has so far proved to be a difficult challenge not only to the previous Government but to Governments before that.

Lord Patel: My Lords, I was hoping that at the end the noble Baroness would be able to say more strongly how the Government intend to take forward today's debate, but I am afraid that she did not do that, which is a pity. There was strong support for HealthWatch England and local healthwatch to have more independence. Her argument about a synergy between the CQC and HealthWatch England is not absolutely correct. Yes, there is a degree of synergy, but not in all areas, including: commissioning, as mentioned by the Minister; community care, where the CQC is not involved; advice to the Secretary of State on the mandate; and social care as it develops to more home-based care where the CQC will not be involved. HealthWatch England has a much wider remit than the CQC.
	I have a rule in life never to oppose anything that the noble Baroness, Lady Cumberlege, says or does and I will not break that rule now. She is always well researched and communicates her research well, but I have to say that her well researched argument supports the Government more and I am surprised that the noble Baroness, Lady Northover, did not feel able to accept some of her amendments. None the less, it is a halfway house that would give more independence to HealthWatch England within the CQC. If we are serious about giving HealthWatch England independence, it should be truly independent. It should have its own powerful voice for the public and patients. It should not be answerable to another body that will control it, fund it and employ its members. That is the great weakness.
	The outside voice of the people involved in this work is strong. They would like to test their work in an independent way. Previously, they have failed because they have not been given that independence. Let us be serious about giving a strong voice to the public and patients. Let us give them independence and see whether they can stand up to the challenge.
	There was a lot of support today but I am willing to continue talking, particularly with the outside organisations, if that commitment can be made by the Government. We will always have an opportunity to come back. I beg leave to withdraw the amendment.
	Amendment 99 withdrawn.
	Amendments 99A and 100 not moved.
	Amendment 100A
	 Moved by Lord Hunt of Kings Heath
	100A: Clause 20, page 16, line 30, at end insert-
	"( ) If, within 60 parliamentary days of the mandate having been laid-
	(a) either House of Parliament makes a recommendation with regard to the proposal, or
	(b) a committee of either House of Parliament makes recommendations with regard to the proposal,
	the Secretary of State must lay before Parliament a statement setting out the Secretary of State's response to the resolution or recommendations."

Lord Hunt of Kings Heath: My Lords, the debate on the first group was instructive on the relationship between Parliament, the Secretary of State and the mandate that the Secretary of State sets for the NHS Commissioning Board. In our final exchange the noble Earl said that he was fearful of Parliament micromanaging the National Health Service. My fear is that that is shorthand for saying that Parliament may be told that it will no longer be able to ask detailed questions about the NHS because it is covered in the mandate. Whatever it may be, the mandate assumes critical importance since it lays out the objectives set for the NHS Commissioning Board by the Secretary of State. My amendment is not about micromanagement, it is about proper parliamentary scrutiny of what the Secretary of State has decided, and it sets out a well tried procedure. The final decision on the mandate will remain with the Secretary of State, but it will allow Parliament to undertake proper scrutiny. I beg to move.

Division on Amendment 100A
	Contents 201; Not-Contents 220.
	Amendment 100A disagreed.

Amendment 101 not moved.
	Amendment 101A not moved.
	Amendment 102
	 Moved by Lord Warner
	102: Clause 20, page 17, line 14, at end insert-
	"(2) In discharging its duty under this section the Board shall establish an independent panel to formulate minimum standards of-
	(a) financial,
	(b) performance, and
	(c) asset,
	management information to be included in the audited accounts for all bodies to which this subsection applies.
	(3) Subsection (2) applies to all bodies commissioning or providing NHS services under annual contracts of at least £500,000.
	(4) The independent panel shall be established-
	(a) within 6 months of this Act receiving Royal Assent, and
	(b) jointly with Monitor on a basis agreed by the National Audit Office.
	(5) The standards formulated by the panel shall be kept under review by the Board and Monitor and, in doing so, they will pay particular regard to the extent to which the standards have ensured levels of public accountability similar to those required of bodies providing comparable services."

Lord Warner: My Lords, I regard this amendment as one of the most important building blocks in the Bill, although I have to confess that I am not sure that it will attract the same enthusiasm from the Government or their Civil Service advisers. The amendment is based on my own experience as a Minister, especially when dealing with the financial meltdown of the NHS in 2005-06-which I have recorded for posterity in a book that I have written on the subject. Since I believe that the NHS is heading for another financial meltdown, Ministers, especially in the Treasury, might give some serious thought to the proposal in Amendment 102.
	There is a very good book about the history of the Audit Commission called Follow the Money. I think that we should do a bit more following of the money so far as the NHS is concerned, and not simply rely on things like outcomes frameworks. At the core of this amendment is the rather simple idea that there should be a minimum set of standardised management accounts covering finance, performance and asset use, applying to all bodies providing NHS services that spend more than £500,000 a year. I have put that fairly arbitrary figure in the amendment so that bodies which are relatively modest spenders are not brought into these requirements. It is a matter for negotiation whether that amount is the right one to set. However, with the bigger, higher spending bodies, we need greater standardisation of management accounts because we need to know more than we know now. At present, we cannot easily compare the performance of similar bodies in terms of how they spend our money, how this expenditure relates to what they produce, the value for money they give and how well they use public assets.
	It has often been forgotten, under successive Governments, that the NHS is, in effect, a major landowner and user of public buildings. The real estate footprint of the NHS is far too large for the buildings on it and the use that is made of them, and I will give a little data later in my remarks. There is, at present, little rigorous assessment of whether the NHS holds on to land unnecessarily, how much of its accommodation and equipment is used well or intensively, or how much of the buildings or land is left vacant. Work done in the London SHA, after my time as a Minister, shows how scandalously poorly the NHS uses land and buildings. There is no reason to believe that the situation is different in other parts of the country. I am happy to give the Minister and his boss chapter and verse outside this debate. However, in a nutshell, in non-foundation trust sites in London, only some 18 per cent of NHS land was built on; another 18 per cent was underutilised; and some 25 per cent of the buildings were functionally unsuitable for the purpose for which they were used. I have given you a snapshot of London two or three years ago, but it is probably not much different now.
	Although we have a great deal of data on the performance of acute hospitals, much of it cannot be related to expenditure because service line accounting-in the jargon-is still not used in most hospitals, especially outside the foundation trust sector. However, acute hospitals are a positive treasure chest of performance data compared with community health services, mental health services and primary care, where any relationship between what they spend and what they deliver is more conspicuous by its absence. Any public company which tried to run its affairs with the same financial performance or asset data as the NHS does would be insolvent very quickly. We should take the opportunity of this Bill to do something about moving to some standardised management accounts for all but the smallest providers.
	If this amendment is passed and this requirement is put into the Bill, it would improve commissioning, choice and competition. Without the data that would be produced by implementing the amendment, it is very difficult to secure effective commissioning, effective choice and effective competition. One simply would not have the data to compare on a standardised basis the performance of many of the bodies involved.
	I recognise that some of your Lordships do not favour competition. It is certainly easy to resist competition in the NHS if it remains a largely data-free zone in terms of finance and performance. Good commissioning and patient choice become very difficult to deliver if one does not have that information on a standardised basis.
	I hope that the Government are prepared to give proper consideration to this longstanding problem. I do not regard this as a party-political issue; this is all about good governance and running the NHS more effectively on behalf of those who are funding it. I beg to move.

Baroness Williams of Crosby: My Lords, it would be very helpful if the Minister could say something about the proposals with regard to the accounts and financial statements made by CCGs, which will obviously depend a great deal on the guidance from the board.
	I am concerned that a number of clinical commissioning groups without any great knowledge of how to deal with audit and financial problems will emerge. You could quite quickly see a commissioning group getting into difficulties, not because it was not performing well but because it had very little awareness of requirements relating to information on its conduct in relation to assets and finances that was needed to establish its standing as a proper clinical commissioning group. I am concerned because there is already some evidence of clinical commissioning groups seeming rather unclear about the accounting standards that they have to live by. It is important that the board makes very clear indeed what its expectations are and that it involves, as the amendment would require, the National Audit Office, which will become-and in some ways is already-a fundamental arbiter on the quality and standards of accounting practices.
	I hope that the Government will consider the amendment carefully and that the Minister will let us know what the Government's intentions are with regard to setting out the standards that they expect from clinical commissioning groups and that the board should lay down. The Bill is currently uncommunicative on the subject.
	The whole process of procuring the pharmaceutical and other products that a commissioning group will need is always problematic. It is crucial that what is required is clearly set out, and that there is an indication under which we can compare one clinical commissioning group with another.

Baroness Cumberlege: My Lords, I should like to probe the amendment a little further because I think that it has a lot of merit, especially when one considers the PFI arrangements that have so destroyed the financial situation within the NHS.
	I should like to ask the noble Lord, Lord Warner, about the accountability of the body. As I understand it, it is to be independent. I presume that he means independent in its membership as well as the way in which it works. I wonder where that accountability lies, whether there is a relationship with the business plan of the Commissioning Board and how the noble Lord sees the body working. Will the panel run for years and years, or will it exist just to set the standards at the beginning? Perhaps we could have a fuller picture.

Lord Warner: My Lords, I am seeking to set up something that would function in the early years of the national Commissioning Board. It would be independent in the sense that I did not want it to be dominated by NHS finance people. I want it to be a broader group of people than just those who have worked in the NHS. There is a tendency on the part of the NHS to think of itself as unique, special and different from other businesses, whereas it is a business which needs some business systems in it.
	I am not someone who wants to keep bodies going in perpetuity. I am certainly open to negotiation on how long this one exists. I feel more strongly about the National Audit Office keeping an eye on this area. The national Commissioning Board needs some outside help to get this started, particularly in asset management, which is a long neglected area in the NHS, as I think the noble Baroness knows.
	Some of the problems with PFI which she mentioned arise from the fact that the NHS has not had a track record of looking after its assets. It does not see them in the terms that a more commercial organisation would do. Many of the things that have gone wrong with PFI are not to do with there being anything inherently wrong with it, because it delivered a lot more hospitals more quickly and effectively than previous public procurement systems. What went wrong was the hubris in the NHS in many parts of the country about its ability to build a Taj Mahal district general hospital with some very dodgy income/revenue flows spread over time, most of the contracts being for 30 years. If one looks at the quality of some of the financial management in the NHS, it is not surprising that it could not do a very good job, even with some outside help, of getting a realistic idea of the revenue that it was likely to generate over 25 to 30 years to fund those projects.

Lord Owen: My Lords, I had not expected to intervene in this debate, but some of the things that I want to say may fit more naturally under this issue. The idea of having a standardised method of comparison right across the National Health Service is a very good one and it has merit if it comes initially from an independent group.
	The Government have a special responsibility here, because, very soon after taking office, they encouraged the noble Lord, Lord Green, to look at all these areas, of which land and asset management was a very important part. We all know that this has not been coherently done in the past and that there are substantial land assets throughout the NHS.
	As we go to smaller and more fragmented units, it is even more important that there is some structure which looks at land management across the board; otherwise it will be seen in a very narrow context. There may be a sale of some land asset which might quite appropriately have been offered to a neighbouring organisation, whether it is a commissioning group or a foundation hospital. The proposed body would cover all aspects, not just commissioning groups but foundation hospitals as well, and so I am very attracted to it.
	The report of the noble Lord, Lord Green, said that not only did government not utilise the efficiencies of having an overall look at land management but also that it had no coherent way of achieving its procurement gains. Any large organisation looks across these areas and maximises the advantages that are available. Procurement has not been done very well in the National Health Service, so there is room for improvement whatever structure is implemented. In the past, regional health authorities had procurement functions and were able to negotiate substantially improved contracts because of the size of the procurement agency. I do not quite know what is going to happen in the procurement field. I therefore put the matter to the Minister so that he can perhaps indicate where he thinks it would be appropriate to raise the issue of procurement in future. Again, I say that the work needs to be done by independent people. That was the advantage of the Green report: he got his people from many different fields and focused on government as a whole. He did not look very closely at the NHS, but there is merit on both these questions of land and procurement in seeing whether we can achieve some economies of scale and in taking a fresh and independent look, which we have not had for some time.

Baroness Murphy: My Lords, I recognise the problem that has been described so ably by the noble Lord, Lord Warner, but I wonder whether he is not being a little pessimistic about the possibilities of the architecture providing the right framework to do what he wants to do. If we look at the role of the economic regulator, it must, as it has under the more restricted role of Monitor, include a very serious analysis of how financial management is happening in provider trusts, or foundation trusts, and has led to the growth of the service level management system, which for the first time has given people an idea about which services are making money, which are losing money, which are loss leaders and so on.
	These are terrible terms when one is talking about human services and I do not like them. Nevertheless they are business terms and we understand what they mean in this context. They have also led to a much more fundamental understanding of the capital assets of each foundation trust. It has led to better use of capital assets at the moment, but that is largely because at a time of massive growth people do not look to make best use of their capital assets. At a time when money is shrinking or staying the same, as it will be over possibly the next 10 years or more, people will be looking to use their capital assets more effectively.
	We must look to the economic regulator to encourage the sort of use of assets that we have so often wanted to encourage in the younger Monitor-to use those assets more effectively and to ensure that we can look across the totality of both community and acute hospital providers at how entrants into the system are using their assets. That would be possible under the new Monitor. I am not sure that we should set up another body to do that although I can see it might have a short term job to make sure that everybody is using the same monitoring mechanisms and is putting in the same sort of systems of financial accounting. With the new architecture we should be able to do that through Monitor.

Lord Warner: My Lords, I should like to respond briefly to the noble Baroness. There is nothing in the amendment that would stop this information being given to Monitor. If people want to amend the amendment in terms of Monitor as the customer for it, I do not feel strongly about that. I have put it under the national Commissioning Board because one of the things it will be doing is, I suspect, giving guidance to clinical commissioning groups on the nature of contracts. One of the requirements that can be used to drive change in this area is contractual requirements on people in terms of the standardisation of accounts. I saw the national Commissioning Board as likely to be able to deliver through this independent panel-which can be as short lived as one wants-the kind of changes that we need.
	I want to emphasise to the House that the financial situation in the NHS is serious and will get really serious over the next few years. We need to improve very rapidly the quality of the financial management accounting systems in the NHS. That is a separate issue from the assets and procurement issue, to which the noble Lord, Lord Owen, has very ably drawn attention, because it is another long-standing problem. The standardisation of management accounts is an urgent issue for the NHS in the brave new world that it is going into, particularly with the large increase in the number of new organisations that are going to start for the first time to handle big sums of money without much clarity about how they are supposed to account for it.

Lord Walton of Detchant: My Lords, I believe it would be helpful to the Committee, even if one leaves aside the crucial role of Monitor with its new, major responsibilities, if the Minister could let us know what kind of administrative support, and in particular what kind of financial management support, Sir David Nicholson and his staff in the national Commissioning Board will have. Can he give us any information about that?

Baroness Morgan of Drefelin: My Lords, I am not sure whether my intervention will complicate the debate further but I very much support the sentiments behind the amendment of the noble Lord, Lord Warner. The idea of standardised management accounts could be very helpful. One of the questions I invite the Minister to address is connected to my concerns about how we ensure that the NHS as an environment for research and innovation and as an engine for our economy is properly promoted and understood. Can the Minister comment on what the role of the Office for Budget Responsibility might be in looking at the NHS spend-the billions of pounds that go into the NHS-and whether there is a role for the Office for Budget Responsibility in looking at how the economy is benefiting from the investment that we make as a country in the NHS.

Lord Hunt of Kings Heath: My Lords, I am grateful to my noble friend for moving the amendment. I should like to start with the question about the scale of the financial challenge. As my noble friend suggested, the amount of money that has got to be taken out of the NHS through efficiency in the next four years is considerable. The indications are that while in the current financial year there will be some parts of the NHS that really struggle, by and large the service is going to get through. However, years two, three and four are going to be much more fundamental challenges. The need for the NHS to use its assets as effectively as possible, to get on with reconfiguration of services, and for all groups involved in the NHS to buy into that kind of change, is going to be essential. The more comparative information that can be provided the better, which is where I hope the Minister will be responsive to my noble friend.
	The noble Lord Lord, Lord Owen, mentioned procurement. I should wear a hat as president of the Health Care Supply Association, and say that he is right to identify procurement as a potential area of much greater efficiency in the future. However, the Minister will know that two recent reports from the Public Accounts Committee have raised concerns about procurement and really are inviting the Minister in particular and the department specifically to take on a much greater leadership role in ensuring-it is rather like the Green report suggested-that the NHS makes the most of its potential buying power. I ask the Minister how, in the devolved structure that the Government are enunciating, we can ensure that on issues such as the use of our assets and procurement we still act as one national service making the most of our buying power? Unless we do that, there are going to be continuous PAC reports looking at the problem of national direction.
	Finally, I endorse the comments made by the noble Baroness, Lady Williams. What about clinical commissioning groups? The Bill is silent on how CCGs are to be accountable. One way would be the publication of comparative performance of how they use their resources-the more comparative performance, the better. I should also like to ask the Minister about primary medical services. As we know, this has always been a difficult area. We have had various efforts through the GP contract to have much more of a performance culture. I cannot say that has been uniformly successful. However, in these days of stringency, I do not think we can get away with that any longer. It would be good to hear how we can extend the whole concept of efficiency performance measurement into an area of the health service, such as GPs themselves, where I am sure there is much more efficiency to be gained.

Earl Howe: My Lords, this has been a useful debate. I should probably say straight away to the noble Lord, Lord Warner, that I am not convinced by the amendment. That is not because I do not believe that the issues that he has raised are important-I certainly do. Good governance is absolutely dependent on having good data and on the financial control that that data enable the board of directors to exercise. It is very much about ensuring throughout the health service that the QIPP agenda is pursued effectively. The QIPP agenda is all about ensuring the more efficient and effective use of money. This could not be a more salient topic at the moment.
	However, Amendment 102, which the noble Lord has proposed, would in my view introduce a new layer of bureaucracy. I hope to show that it is not required. My main reason for saying that is that accounting and disclosure requirements for the Department of Health and all NHS bodies are ultimately set by the Treasury. These are already based on independent advice.
	I am conscious that that is rather a condensed answer, so, if I may, I should like to go into a little detail as to how this will work. Paragraph 15 of the new Schedule A1 to the NHS Act, inserted by Schedule 1 to the Bill, enables the Secretary of State, with the agreement of the Treasury, to specify the form and content of the board's accounts and the methods and principles to be applied in their preparation. The Bill places an obligation on the board to produce annual accounts, as well as in-year accounts covering shorter periods if necessary.
	In addition, the Bill provides powers for the Secretary of State to require such other information as is considered necessary for the purpose of exercising his functions in relation to the health service. This is what one might term management information-data required by those controlling funding or setting policy alongside the financial returns in order to provide an accurate picture of issues such as staffing levels.
	For clinical commissioning groups, it is the NHS Commissioning Board that sets the accounting and reporting requirements. It will do so in a way that is consistent with requirements set by the Secretary of State, and approved by the Treasury for the purposes of consolidation.
	My noble friend Lady Williams expressed the fear that CCGs may not be well equipped to handle that kind of reporting. The board will set the accounting and reporting requirements for CCGs, as I indicated. Paragraph 16 of Schedule 1A to the NHS Act 2006, inserted by Schedule 2 to the Bill, allows the board, with the approval of the Secretary of State, to give directions to CCGs as to the methods and principles of accounting which they must use and the form and content of their accounts. That will provide a means whereby much greater control can be had over the form, content and consistency of those accounts.
	These provisions are mirrored in relation to NHS foundation trusts, with Monitor or the Secretary of State specifying the form and content of the trusts' accounts, again with Treasury agreement.
	The noble Lord, Lord Owen, raised the extremely important issue of procurement. It is a separate issue to the one that we are discussing here, but it is allied to it. It is extremely relevant at the moment. He will be interested to know that a great deal of work is going on in the department on this. He asked where it might be best to discuss procurement issues. I suggest that we do so in Clause 71, which is within Chapter 2 of Part 3. Far be it for me to encourage any noble Lord to table further amendments, but if the noble Lord, Lord Owen, would care to do so, we could have a useful debate on that topic.
	Together, these requirements will ensure a high degree of consistency and comparability across all NHS bodies. That is the key point. Amendment 102 sets its sights on that idea and I do not disagree with that. The trouble is that it appears to override the line of accountability that I have set out, and the powers of the Treasury and Secretary of State to determine the standards of financial reporting. I cannot agree with the noble Lord that it would be helpful to move this responsibility to an entirely separate panel.
	Furthermore, the Treasury, the Department of Health and Monitor are under a specific duty under the Government Resources and Accounts Act to consult with the Financial Reporting Advisory Board in arriving at reporting requirements. That advisory board is independent and would seem already to fulfil the role that is proposed for the independent panel under this amendment.
	Amendment 102 would also impose additional accounting requirements on non-statutory providers of NHS services. Statutory providers-for example NHS trusts and foundation trusts-are already subject to the type of accounting requirements set out in this amendment. However, for non-statutory providers operating in a competitive market, such requirements might be commercially prejudicial to their interests. I am afraid that I also think that the imposition of additional, centrally determined accounting and reporting requirements would be expensive and onerous for non-NHS providers or commissioners, many of which are subject to existing Companies Act and charities legislation disclosure requirements in any case.
	The noble Lord, Lord Hunt, referred to primary medical services. That is where the amendment has another wrinkle, because it might also be deemed to apply to some GP practices; GPs being independent contractors providing NHS services. I have difficulty with the idea that it is equitable or indeed necessary to open up GP partnership accounts to wider public scrutiny in a situation where GP remuneration, fees and allowances are determined nationally.
	The noble Baroness, Lady Morgan, asked-

Baroness Finlay of Llandaff: Before the Minister sits down, will he say why, if he feels that other accounts of public money should be open, general practitioners' accounts of public money should not be open within the practice? This is public money that they will be receiving.

Earl Howe: Practices will be accountable for the money that they receive to commission services, as will CCGs. But it is another matter to say that independent private individuals should lay open what are effectively their tax returns to the general public. That is the sensitivity there.

Baroness Finlay of Llandaff: This is not about GPs' private incomes and tax returns. This is about the finances of the business, which is their practice partnership, and within that the way in which that money is being spent on business, just as other business accounts have to be open and filed.

Earl Howe: I understand the noble Baroness's point. Clearly, we want to see maximum accountability for public money. Does the noble Lord wish to intervene?

Lord Warner: I do not particularly want to intervene about GPs. I can understand to some extent what the noble Earl is saying about them. I am more concerned that the noble Earl has given us a lot of information about powers in the Bill for people to do things. I recognise only too well official defence in depth of the current status quo. I have had many a brief along those lines in my time, so I can see that.
	What I am really interested in is how the Government are going to use those powers that they have taken in this Bill to deliver the kind of ideas that are actually in my amendment. I want to know what work is going on to produce the kind of comparative data that this amendment seeks to deliver to an unsuspecting world, from this variety of providers; not least because it is not just about accounting standards in financial terms, it is about the relationship of that expenditure to what is being delivered. That is why I have deliberately used the term "management accounts", not just financial accounts. The public, and many of us, want to see the NHS showing how it has spent the money and what it has produced for that, and to see that on a standardised basis. I remain very sceptical whether the QUIP accounts deliver that. That is the issue that the NHS has to face up to. Unless we tackle that and can use the powers that the noble Earl has referred to in the Bill-and I am happy to come back on Report with a new amendment that relates to those powers-to deliver the comparative management account data, I do not think we are progressing matters very far from where we are now. I would very much welcome a more detailed discussion on this issue with the noble Earl, and with any other noble Lords, before the next part of this Bill, so that we can get to the bottom of this and help the Government use the powers that they are taking in a more constructive way.

Earl Howe: My Lords, I would be delighted to have that conversation. I did not in the least mean to suggest that the ideas the noble Lord has put forward are in any way irrelevant. Indeed, quite the opposite, I am aware that there is a lot of work going on at the moment in the very areas that he has highlighted. I would be happy to write to him about that, if that would help as a precursor to a meeting.
	I will just cover a couple of the questions that have been asked. The noble Baroness, Lady Morgan, asked to what extent the Office of Budget Responsibility would be involved. The OBR has a very specific role in terms of producing economic information. We would not see a role for the OBR itself in analysing the impact of NHS spending, but this is an area that is always under close scrutiny across the Government, in the Department of Health and beyond. I am leaving the possibility slightly open, if I may.
	The noble Lord, Lord Walton, asked whether Sir David Nicholson would have sufficient financial expertise alongside him on the board. Sir David Nicholsonhas said in Developing the NHS Commissioning Board, published earlier this year, that the board will have a finance director as part of its leadership team. That is all I can tell him at the moment. However, it is clear that the board will have a major task in ensuring that sufficient financial control is maintained over the health service as a whole. If it fails to do so-as the noble Lord, Lord Warner, rightly reminded us-we are all in trouble.
	The noble Lord, Lord Hunt, asked how we can achieve comparable performance measurement of CCGs. The board will be required to publish an assessment of CCG performance annually, including their financial functions. It must also publish a summary report of the performance of all CCGs.
	The amendment is well intended; I have no difficulty with that. However, in practice, as framed, it would be onerous and cut across established government responsibilities. I know the noble Lord, Lord Warner, thinks I am just defending the status quo, but I am trying to say that I am not sure his formula would add much value, particularly as the underlying purpose of the amendment is already achieved under existing arrangements. For those reasons, I hope he will feel comfortable-for the time being-in withdrawing it.

Lord Hunt of Kings Heath: My Lords, I am grateful for the Minister's response on clinical commissioning groups, but I come back to the question of GPs. Along with the noble Baroness, Lady Finlay, I do not think I was seeking to look at their business arrangements, but I am seeking to find out how their performance as primary medical providers is going to be measured in the future. When the Secretary of State announced his reforms, shortly after coming into Government, he emphasised that he wanted to put responsibility for budgets alongside responsibility for expenditure, on the basis that GPs, either through referral or through prescribing, were responsible for most expenditure in the NHS. I assume the intention was, essentially, to encourage GPs to be much more effective in what they did in primary medicine, as it would impact on their budgetary situation; but, given that, how do we get to a situation where we can start to measure the performance of GPs? I do not pretend that it is easy-as I said earlier, I think our own experience with the GP contract shows some of the challenges. However, I would have thought that for the future, some comparative information about GP performance, in addition to the prescribing information that is now available, would help. For instance, one issue would be how good they are at demand management. How good are they at preventing their patients from inappropriately going to hospital? I would have thought this was a rich gold seam.

Earl Howe: I could not agree more with the noble Lord. We want to get closer to the question of what represents value for money in primary care. There are perhaps two principal ingredients of that equation. The first is the money we put into primary care, which we will know through the resource allocation formula, with which the noble Lord is familiar; the second is through highlighting the results achieved through primary care. Primary care clinicians will be accountable as never before by reference to the outcomes that they achieve for their patients. The other ingredient, overarching all that, is transparency. The more measures of performance that we can devise and place into the public domain the better in my view, and in the next few weeks, we will be announcing measures that I hope will be welcome in that regard. However, we are starting from a low base-not much information is currently published. We want to change that, and ensure not only that clinical commissioning groups and the NHS board are aware of all this but that patients and the public are aware of how well or badly a practice is performing. All these things such as prescribing rates and referral rates are key measures of performance, which we have to get closer to. If we can ensure that practices themselves are more able to compare their own performance with those of their peers, that too will be an advance. I am sure that this is a rich seam, as the noble Lord put it, and we very much hope to advance on that front over the coming months.

Baroness Young of Old Scone: Can I just press him on that point? We have a situation at the moment that I think is not in patients' interests. If you want to find out about the quality of diabetes care by provider, hospital or trust in this country, you can find out about it perfectly well; if you want to find out about the quality of diabetes care commissioned by a PCT, you can find out about it perfectly well. The quality of care being delivered to people with diabetes by general practitioners is available and can be seen by general practitioners-who can compare their performance with each other-but it is not available for people with diabetes. Quite frankly, I think that is outrageous and I would urge the Minister to do something about that now.

Earl Howe: The noble Baroness, with her passion for this important area of care, makes an extremely important point. I will take that point away and see what more I can tell her about the work that is going on in that area.

Lord Warner: My Lords, this has been a very interesting debate. It was never my intention to assume that the way in which this amendment was framed was the last word on the subject. It is helpful to know that there are provisions in the Bill that can be used or adapted for the purposes that I was seeking to produce. I still remain concerned that we need to use the powers that the Government are taking in a very speedy and effective way to link finance with performance data on a standardised basis. We need to get on with that. It needs to be in place by the time the SHAs disappear. The SHAs have been holding some of this stuff together. Once they go, we will need better systems than we have now to monitor performance and money. As the noble Baroness, Lady Young, has said, we need that matter to be in the public arena as well; it is not just for the closed world of the NHS. I hope that we can have some useful dialogue on this before Report to see whether we can secure amendments to the existing arrangements that will improve things.
	Amendment 102 withdrawn.
	Amendment 103
	 Moved by Lord Warner
	103: Clause 20, page 17, line 14, at end insert-
	"( ) In discharging this duty, the Board must annually agree with Monitor new currencies for pricing under the national tariff that incentivise more efficient integrated clinical care pathways for patients, especially those with long-term conditions, and that minimise the use of in-patient hospital services."

Lord Warner: My Lords, I apologise as I seem to have a series of amendments to this part of the Bill with my name on them. Amendment 103 is the first amendment in this group in my name and that of the noble Lord, Lord Patel, and the noble Baroness, Lady Murphy. It brings us to the first of what I suspect will be a number of debates on the complex and difficult issue of a national tariff and the need to use that tariff to ensure the most appropriate forms of care and care pathways for patients.
	This is a time for confessions. The current tariff system, which I am afraid I was deeply involved in implementing to scale seven years ago, was designed for a different era when there was considerable financial growth and we were trying to drive acute hospitals to increase capacity to dramatically reduce waiting times for treatment. Those long waiting times, which had been a feature of the NHS for a long period, were the part of the NHS that led to the most complaints being made. They were the issue to which any Government needed to pay attention. The tariff was one of the ways of helping to progress that. The other was, of course, the much maligned targets, which we need not go into at this point.
	In some ways, the current tariff has been too successful. It has helped to create overcapacity in in-patient hospital provision and has propped up poor and unsustainable hospital provision in some parts of the country. The current tariff does not promote well co-ordinated, integrated care for people with long-term conditions, which is the bulk of the NHS's workload, given our demographic profile and some of our lifestyle choices. A significant proportion of services, particularly mental health and community services, are simply not covered by the national tariff and are often still dealt with on the basis of block grants. In 2012-13, the plan is to focus mainly on developing currencies rather than mandatory tariffs. This means that the majority of non-acute services will remain outside the national tariff. What is more worrying is the fact that the continuation of an acute hospital-dominated tariff based on episodes of care without any counterbalance risks these hospital trusts sucking in a disproportionately large amount of our NHS budget, which is shrinking in real terms. This is not a jibe at the Government except to say that they should stop pretending that the NHS can continue with real-terms growth and deliver the Nicholson challenge, as should any political party, including my own.
	Tariff-setting is a technically complex business. There are plans to expand it into fields such as mental health where there is no international track record of success in doing that. There are no quick fixes, particularly if there are insufficient people working on a new tariff system. Tariff-setting relies totally on a good understanding of costs, an area where the NHS does not have great strengths, as I think we have just discussed. The current reference cost system has considerable shortcomings and excludes independent sector providers. Most of the rhetoric on price competition is just that-rhetoric-because reliable data to make price competition work effectively within the NHS are usually absent, so we are having a row about something that we probably could not deliver anyway.
	The best that this Bill can do is to try to set a direction for future tariff design. The elements of that design should be fourfold. First, it should enable integrated care, not just within the NHS but across the health/social care boundary. This almost certainly means moving away from the tariff based on episodes of care to a year-of-care approach for long-term conditions, or a bundling of the services across care pathways. Secondly, a future tariff system should not be based on average cost, as now, but on best practice for particular conditions. Thirdly, the currencies in a new national tariff should cover the full range of services, not just acute care, which needs to diminish its dominance of the tariff. Fourthly, it should cover unavoidable costs and avoid windfall profits to providers. Unless we start designing a tariff system around those ideas, we will not progress towards a new NHS.
	It will take at least three or four years at best to complete a national tariff covering a full range of services. However, I believe that we should set a clear direction of travel for the national Commissioning Board in the Bill. Given the responsibility of commissioners for demand management, it is right that if we are to have a national Commissioning Board it should set the currencies for a new tariff system. That is why Amendment 103 seeks to place the duty on the board to progress this work and to create some momentum by securing annual increments of progress. We can discuss later whether the board should also price the currencies rather than Monitor, but that is a subject for a debate on another day.
	In the mean time, I wish to speak in support of Amendment 290 in my name and others in this group of amendments. This amendment would enable whoever is setting the prices in the tariff-currently Monitor in the Bill-to pay incentives to providers to integrate the delivery of health and social care services to individuals. It seems to me that we use the word "integration" without realising that it probably requires someone to do a bit more work than they are doing now to integrate the services, and that has a cost. This should be recognised in setting the tariff for the future so that service providers can be encouraged to take on the difficult job of integration without losing money in doing so. I hope that the Minister will see merit in these amendments and, indeed, others in the group, which move in a similar direction to mine. We need to set the agenda for the board in taking this difficult area of tariff work forward. I beg to move.

Lord Patel: My Lords, my name is added to Amendment 103 and other amendments in the group. Amendment 197E, which is a new amendment relating to commissioning, also stands in my name. Some of the points that I will make are similar to those made by the noble Lord, Lord Warner, but I have a slightly different way of looking at tariffs. I see them more from a clinical or patient care pathway point of view than that of integrating services. It is true that tackling the financial physiology of the NHS is critical to enabling the more influential and focused commissioning of integrated care. The payment by results tariff was designed by the previous Government to support the introduction of choice and competition, and specifically to create incentives for providers to increase elective activity to bring down waiting times for treatment and reward them for work undertaken. As the noble Lord, Lord Warner, has just said, that has been a bonanza for some of the acute trusts.
	The tariff has played its part in that process with the consequence that access to planned care has improved significantly. Progress in elective care has enabled-or should enable-attention to turn to other priorities, such as providing high-quality care for people with long-term conditions where continuity and co-ordination are key objectives alongside access. This includes shifting unplanned care from secondary to primary care settings, where this will help deliver improvements in efficiency.
	As currently designed and operated, payment by results does not appear to be well suited to support the implementation of these priorities, and there is a need to develop incentives that will facilitate integrated care for people with long-term conditions and for other services where this approach is likely to bring benefits. Experience in the United States offers valuable learning in this regard, but it is not the only place, particularly in the development of new forms of payment that go beyond fee for service and case-based reimbursement.
	The idea behind episode-based payments-something that my noble friend Lord Warner also referred to-is to remove incentives to deliver increasing volumes of care by bundling together payments for a range of services relating to a particular episode of treatment. One example from the United States is the ProvenCare programme of the Geisinger health system under which a global fee covers the entire cost of cardiac care from pre-admission and surgery to follow-up for up to 90 days after surgery. Episode-based payments are designed in part to improve the quality of care by placing the responsibility on providers for avoiding and correcting errors. You do not get paid if you make a mistake and it takes the patient longer to recover. This encourages care to be done right the first time, and hence offers a more co-ordinated and positive experience for patients.
	Capitation payments on the other hand go much further than episode-based payments in potentially covering all the costs of care for a defined population over a certain time period-a year, for example. Integrated healthcare systems such as Kaiser Permanente in California have pioneered the use of capitation funding-or pre-paid group practice as it was originally known-as a way of creating incentives to support prevention and primary care and to avoid the inappropriate use of specialist care. Kaiser Permanente sees acute care as a cost centre, but it sees community care and primary care, particularly for long-term conditions, as where the costs should be maintained and the quality driven. It monitors the performance of the providers of that care more intensively on a one-to-one basis than it does for acute care.
	Although capitation funding has a long history, there has been renewed interest in it. In the NHS, various options could be pursued. These include combining payments to cover an episode of care or a care pathway, taking forward the idea of the year of care that has been tested in three national pilots for diabetes-I say this to the noble Baroness, Lady Young-and exploring how it might support integrated care; contracting with local clinical networks of primary and secondary care clinicians or foundation trusts to deliver integrated care for a specific population-some of the foundation trusts are experimenting with this and are quite innovative; and, lastly, accelerating work on personal health budgets to enable patients to commission care packages for themselves, with support from carers and families.
	In practice, it is likely that all these options, and others, will have to play a part, and a period of active experimentation and evaluation is now needed to work through the consequences. All healthcare systems use a mix of payment systems related to the service that is provided, such as episodic or long-term, and where care is provided, such as primary or secondary care. The NHS is no exception and attention is needed for the way in which financial incentives can be developed to support integrated care where it will bring benefits to patients. The prospect of four years in which the NHS budget will only increase in line with inflation underlines the urgency associated with this work and the need to focus on improving the quality of care and not simply incentivising extra activity at a time when resources are not available to do this. As my noble friend Lord Warner said, it will require tariff flexibility, even tariff bonuses for providing care quicker and of a higher quality. What is needed is system leadership and innovation, which we expect the NHS Commission to deliver boldly, in tariffs for integrated care, with the explicit promotion of systems of integrated care.
	My Amendment 197E relates to clinical commissioning and clinical commissioning groups. We had a debate about the role of senates, which did not get us very far. One of the issues is that the creation of additional bodies after the listening exercise has confused the state as to the role of these bodies and how commissioning groups can be independent. I know that the Government have given the assurance that these bodies will not have the power to veto these commissioning plans. A recent letter to NHS chief executives from Dr Kathy McLean, chair of the Future Forum group on clinical advice and leadership, also sought to allay these fears when she said:
	"They are not intended to be another layer of bureaucracy or be a structure to 'interfere' with or constrain clinical commissioning groups. Senates may provide part of the way for clinical commissioning groups to meet their proposed statutory duty to secure advice from a wide range of health professionals, but they will not have a right of veto for plans or proposals".
	Although this is the case, there needs to be provision in the Bill that protects the ability of clinical commissioning groups to lead on commissioning.
	The second reason is that appropriate advice for one CCG might be inappropriate for another. We hear there will be 15 senates, and these will have to provide advice to over 300 commissioning groups. It is unclear whether the advice for each will be different. If it is the same, how will this reflect the fact that clinical commissioning groups vary immensely? For example, the Redhouse Group pathfinder commissioning group in Hertfordshire has a population size of 18,000, whereas the Oxfordshire pathfinder group has a population of 672,000.
	If the advice is given by region, there may well be commissioning groups within the regions that are atypical, meaning that any commissioning advice given on this basis is very likely to given without reference to the local context. This regional commissioning advice may not pay regard to the fact that a commissioning group is in a particularly deprived urban area, for instance, or has a higher proportion of older people. Commissioning groups need the freedom to make the decisions for their own population. They must not be hamstrung by ever-increasing levels of complex bureaucracy that impede decision-making.
	My amendment therefore seeks to clarify in the legislation what the Government have already said about where the ultimate commissioning responsibility lies so that clinical commissioning groups can truly lead in providing a service for their local population.

Baroness Thornton: My Lords, I wonder if I might speak to both of the amendments that are down in the name of my noble friend, but also to take a step back from the very competent and skilled amendments and presentations by my noble friend Lord Warner and the noble Lord, Lord Patel. All these amendments also reveal what might be called a profound lack of agreement about what "integration" actually is. It seemed to me that at this point it might be useful to go and scope what people think integration means, and then perhaps ask the Minister to say which of these meanings he prefers, or which he would like to use. For example, the Royal College of Nursing is extremely worried that the combination of a maximum tariff and any qualified provider means that delivering integrated services will become increasingly difficult.
	The NHS Confederation confirmed that the definitions of "integration" and "integrated care" to be used by Monitor,
	"will allow different kinds of integration. For example: bringing together specialist services like trauma at one site, or integrating a person's health and social care into one package, or offering a 'package' of care across a large population".
	However, it also goes on to say that:
	"Though extending the tariff is the best way to ensure competition is on quality",
	in some circumstances,
	"it must be recognised that getting the tariff right is a highly complicated task".
	How will this deliver integrated care?
	The King's Fund states that:
	"Organisational integration appears to be neither necessary nor sufficient to deliver the benefits of integrated care, notwithstanding the achievements of integrated systems such as the Veterans Health Administration".
	It goes on to talk about the Kaiser example mentioned by the noble Lord, Lord Patel. The fund also says that the Government's reforms being centred on extending patient choice and provider competition includes encouragement to any willing provider to deliver care to patients and to complete separation of commissioning and provision with the NHS. However, the results could be a system in which there is commissioning from and choice between an "increasingly fragmented array" of competing public, private and voluntary sector providers. As a consequence, integration would be difficult to achieve.
	The Nuffield Foundation says, on the tariff and incentive integrated care, that the payment by results tariff was designed primarily, as my noble friend said in his initial remarks, to support choice in competition and bring down waiting lists for elective treatment. It does not appear to be well suited to supporting integrated care for people with long-term and complex conditions.
	I am sure that the noble Baroness, Lady Young, will talk to us about diabetes, but briefing to us said that people with diabetes already need at least 14 different sorts of NHS services for them to lead long and healthy lives. That seems to be a challenge.
	Arthritis Care's recent response to the Future Forum consultation on integrated services, published a couple of days ago, is very pertinent indeed. It says that:
	"'Integration' should be broadly understood as providing patient-centred, joined-up care which meets the clinical and personal needs of the patient at every point of their pathway. Arthritis Care fully endorses and recommends National Voices' Principles for Integrated Care as a key reference point for all discussions on this issue ... There must, above all, be a firm focus on the patient. What 'integration' looks like is likely to vary geographically and by service, but the specific structures and arrangements matter less than whether services are successfully meeting patient needs and expectations. What it ultimately comes down to is better care for patients and smarter use of resources".
	I think that is absolutely right.
	The amendments that my noble friend and I have tabled are Amendments 104A and 178A. Like others in the group, they seek to place a duty on both board and CCGs to take account of the interdependence of services and the impact that the arrangements might have on sustainability, both financial and clinical, of other services. We are concerned that the regime that has been outlined in the Bill places a risk on the coherence of those services. I ask the Minister whether that is on the risk register and what it has to say about the risks that that places on those services.
	My noble friend Lord Patel of Bradford, who is unable to be here this evening-I am happy to make these remarks partly on his behalf-is concerned about the disadvantaged people in the care system who are detained under the Mental Health Act. By definition, this is a group of service users who have very little ability to exercise choice or control. In a way, I think that this is a group of people against whom the test of integration and the test of this system should be used. If it can work for this group of people, it may work for others. As they are in a highly vulnerable position, there is an absolute need for integration among health and social care providers that starts at the point of hospital admission and goes right through to the end of their aftercare in the community. The effective provision of such a care pathway requires multiple agencies to work closely together. We know that from many inquiries into suicides and homicides involving people with mental illnesses, and it is highly challenging. There is a very real concern shared by patients, carers, doctors and nurses that encouraging competition in this complex area, without checks and balances to ensure that integration is a primary driver, is very damaging indeed. I know that the noble Baroness, Lady Hollins, will refer to her amendment, and we would support that; I could not have put it better myself.
	This is a very complicated and complex issue. It is the first time that we have talked about it in Committee. One thing that the Minister needs to do at this stage is to focus on what the Government mean by different forms of integration and where they will apply and how the Bill will deliver them.

Lord Clement-Jones: My Lords, the noble Baroness, Lady Thornton, has given us a very wide range of views on what integration consists of. In putting forward Amendment 135A, perhaps I can add another perspective from the point of view of specialised commissioning.
	On 14 November, the Minister lifted the veil, to some extent, on how specialised commissioning would work under the Bill. The Bill brings the budget and responsibility for commissioning specialised services together under the NHS Commissioning Board. That has been welcomed by many, including the Specialised Healthcare Alliance, and it gives a real opportunity to deliver the recommendations of the Carter report of 2006. However, the expected benefits of this new system will be fully realised only if there is effective and real co-ordination between the various parties involved in the commissioning, provision and use of specialised services. However, that increases the challenge of integration under this clause, given the gap that would open up between the board at national level and providers at local level, if no steps were taken to bridge it.
	There is a danger that the board's work would become isolated from local commissioners, providers, clinicians and patients and that proper involvement, collaboration and dialogue with those key stakeholders may not occur. In particular, that could lead to pathways of care becoming disjointed, resulting in a poorer experience for patients, inefficient care and higher costs. In addition, it will be imperative to ensure that clinicians and patients are at the heart of all aspects of specialised services, including specialised commissioning. However, although the full subnational offices of the board which, as I understand it, are proposed would nominally give it a more local presence, they bear no real relationship to where the specialist providers are based and patient flows. The patient organisations within the Specialised Healthcare Alliance, therefore, see it as essential that there should be a more local presence; in their view, four clusters would be inadequate.
	At col. 541 of Hansard on 14 November, the Minister was not able to be specific when he spoke about this, but as I understand it there will be around a dozen major hubs. An assurance on the parliamentary record would be very welcome. What form of substructure will there be for specialised commissioning if that is not to be the shape of it? Can he give further clarification today? Will this be delivered by the board or will it be delivered in other forms by way of senate, networks or in other forms?
	Having heard from the NHS Alliance yesterday about the need for local variation, I am very attracted by Amendment 197E in the name of the noble Lord, Lord Patel, which to me seems to hit the spot in allowing that variation and giving the CCGs the final say in how they conduct themselves. That has been put to several of us by the NHS Alliance as being absolutely crucial in allowing the various innovations and initiatives to thrive at local level in the CCGs, which are already becoming an interesting and improved way of delivering healthcare.

Lord Ribeiro: My Lords, I thank the noble Baroness, Lady Thornton, for her comments about integration, because I agree with her that we do not have a clear definition. On page 18 of the Bill, new Section 13M is headed:
	"Duty as to promoting integration".
	Although the words "integration" and "integrated" are used in the section, there is no clear definition. Yet, in new subsection 4, there is an attempt to define "health-related services" and "social care services", but not until new Section 13Z3 is there an interpretation which tries to define the "health service" and "health services". We do need some clear definition of what we mean by integration. Let me tell you what I thought integration meant, when I first took on an interest in the Bill, and I will illustrate it with some examples.
	Integration, for me, was not being able to talk to my GP colleague about a patient without having to go through the PCT. I could not just pick up the telephone and say, "I'll see your patient next Friday". It had to go through a bureaucratic system before the patient got to me.
	From a clinical point of view, when I was referred a patient with gallstones on a Monday morning clinic, after discussing and examining the patient, confirming that she did indeed have gallstones-and I used to have an ultrasound machine in my out-patient clinic, so it was easy to make the diagnosis-I said to her, "I think we can deal with this quite easily with a keyhole operation to remove your gallbladder, but I suspect you may also have an ulcer in your stomach, so before I put you on the list for surgery, it might be a good idea to exclude that". I went down the corridor to see my gastroenterology colleague, told him about the problem, and he said, "Not an issue, bring her along, and I'll see her". Before I knew it, I had had a phone call saying, "I will deal with her next Thursday and gastroscope her".
	The net result of that was that within a week we had an answer for the lady, and I was able to put her on the waiting list for surgery. However, when choice and tariffs came in, it was essential, for the hospital to be paid, that when the patient came to see me in the outpatients' clinic and was diagnosed with gallstones, I would have to refer her back to her GP, who would then make another consultation with the clinician gastroenterologist in order for her to have the endoscopy to diagnose her ulcer. Those were two inconvenient visits for that patient, purely to fulfil the need to manage the tariff and the issues around choice.
	For me, an integrated service gets rid of all those barriers. We should also remember that this is the Health and Social Care Bill; it is about integrating services from the beginning to the end. I have tremendous sympathy and support for Amendments 103 and 290, from the noble Lord, Lord Warner, because they are about getting rid of episodic care. It was precisely the episodic tariffs that required my patient to make two visits to the hospital when one would have done. I hope the Minister will take this into consideration when reviewing this. It is important that we find a formula, or a way to look at the care pathway, and find a way to cost that, rather than the episodic costing of care.

Lord Turnberg: My Lords, I will speak to Amendments 103, 104A, 106, 135A, and several of the others in this group. Clause 20, new Section 13M, highlights integration of services as something the Commissioning Board should "exercise its functions" to secure,
	"where it considers that this would-
	(a) improve the quality of those services".
	That is all well and good, but by itself it seems insufficient. Integration is of course difficult to pin down. We have heard quite a bit about that this evening, and I will not repeat those remarks. I know what I mean by integration, so I will give you my particular understanding, for the purposes I want to talk about, using the term to mean a seamless service for those patients, usually elderly and with multiple diseases, who need both hospital and community care, and flit between the two.
	It is unfortunately the case that the integration that is needed between health and social services has seen so many failures and been so elusive, despite many wasted words. We have an opportunity here to correct these failures, so I was somewhat disappointed when the Minister said in the debate on 2 November, when we were discussing the role of the Secretary of State, that the Government were,
	"not in the business of dictating the processes"-
	and that-
	"integration is neither a necessary nor a sufficient condition of a good outcome".-[Official Report, 2/11/11; col. 1334.]
	Surely if integrated care is a good thing-and I think few will deny that-then we must give a lead on how it might be achieved. We cannot ignore the process, and must at least try to see what conditions are necessary for successful integration. We should not go around simply saying it is a good thing, without showing how it might be achieved.
	There are many examples out there that we can build upon. We are not entirely in uncharted territory. The noble Baroness, Lady Cumberlege, mentioned Assura Cambridge and services in Torbay in our last debate, and other noble Lords spoke of Kaiser Permanente, Northern Ireland, personal health budgets and information sharing, as valuable means to an end.
	We also have the excellent report from the Nuffield Trust, Integration in Action, that analyses successful integration being carried out in four places across the world, including in Scotland. We are not working in a vacuum, and we could and should take advantage of all this information, and incorporate some of those ideas in the Bill without waiting for yet further work.
	Of course, not everything can or should be put in the Bill, but we should see where we can strengthen it, by including more pointers to how we can improve the present, very unsatisfactory, position. Let me give some examples, leaning heavily on the Nuffield Trust report. First, the Commissioning Board should point the way by developing commissioning for bundled payments, and local tariffs for key conditions. I think that is possible. At the moment, fees for service for episodes of hospital care, as we have heard, work against integration with community service. That is something that the board should seek to redress quickly.
	Secondly, we should design the national tariffs that we have heard about, which incorporate a full care pathway across the health and social service divide. Monitor and the board should work together to develop a pricing strategy that provides the incentives for integration. They should also develop ideas about how outcome measures, which are admittedly difficult to quantify when we are talking about a complex system like integrated care between hospital and social care, can be used to promote integration across the whole pathway of care. Contracts based on those measures can encourage providers to respond to the need to integrate. There is nothing here that obviates competition between providers, which I am sure will please my noble friend Lord Warner.
	We will come later in the Bill to Monitor, but it too should link improvements in outcomes, including the patient's experience, to the way it regulates integration. Then, there are several measures that clinical commissioning groups and local authorities should be encouraged to develop by the Commissioning Board. One huge area is of the improvements we desperately need in the flow of information between hospitals and community. Too often we rely on phone calls on the day of discharge, which is inefficient and fails most of the time. We should have an IT system which allows information to be shared across the divide. It only requires a competent programmer to produce the programme, and a safe system for preserving patient confidentiality and data protection. I am sure that that is not beyond our capacity.
	There is also the need for joint funding and integrated governance arrangements, which we have had some discussion about. This is much easier said than done, but it can be done. We have seen it in action here and there and we must spread the good practice.
	There is also the need for people to make the whole thing work on the ground: for example, liaison officers whose sole responsibility is to ensure that patients pass seamlessly across the divide, and nurses and doctors who move without constraint from one sphere to another. The example of specialist district nurses is a good one. They follow patients from hospital to the community and back, and are very much appreciated. Unfortunately, they are a threatened species and are disappearing, largely because neither the NHS nor local authorities will fund them. We must get around that problem.
	Of course, much of what is needed depends on a change in the mindset of those working at the coalface in hospitals and the community. If through the Bill we can change the conditions from those that inhibit collaboration to those that encourage it, we can begin the process. The amendments bring a greater sense of the need to focus more strongly and urgently on the duties and responsibilities of the board in putting integration more firmly on the map as a way of improving outcomes. I support them strongly.

Baroness Hollins: My Lords, I will speak to Amendment 203A in my name and those of my noble friend Lady Finlay and the noble Lords, Lord Patel of Bradford and Lord Patel. I will speak also in support of Amendments 135C and 135D, tabled by my noble friend Lady Finlay.
	The Bill seems to favour the commissioning of services through the any-qualified-provider model rather than being concerned primarily with commissioning an integrated model of care. Amendment 203A would introduce a duty on clinical commissioning groups to commission multiple providers of health services competing to deliver a section of the care pathway only where they can demonstrate to the NHS Commissioning Board that the approach is beneficial to patients. Integrated care pathways are particularly important in complex, long-term conditions such as serious mental illness or challenging behaviour, for example in someone with learning disabilities who is also on the autistic spectrum.
	There have been attempts in the NHS to deliver integrated care pathways, with varying degrees of success. The introduction of a plurality of providers in mental health services in recent years is already showing signs of fragmenting complex care pathways in some instances. The disaster of Winterbourne View is just one example of how commissioning one provider to deliver part of a pathway without planning, commissioning and co-ordinating the whole of an integrated pathway can be an expensive and tragic mistake.
	The further introduction of competition between providers has the aim of reducing the cost of provision while maintaining and improving the standard. This is a noble aim on which we may all be able to agree. However, commissioners must evaluate whether the aim is being achieved, recognising that care pathways vary hugely in different conditions and even for different patients. The variety of provision needed means that we cannot easily-if at all-prescribe a rule to cover all situations. Of course, the health service exists to serve patients, not providers. It is in this light that we must consider proposals to introduce competition between providers, and it is because of this that the burden of proof must be on those who favour increasing competition to show that doing so would benefit patients.
	The risk is that many providers will compete to provide more profitable parts of a pathway, cherry-picking the parts they would like to offer, perhaps only to the least complex patients, thus leaving unmet the less easy to cost and define but still essential parts of the pathway. The importance of an integrated care pathway cannot be overestimated. The comfort patients take in knowing that their entire provision is being dealt with in a coherent, joined-up way may be put at risk under an any-qualified-provider system. As always, it is the most vulnerable patients whose needs may remain unmet.
	Rather than supporting one lead provider, we must create integrated pathways across primary, secondary and tertiary care, in partnership with social services and community support agencies as appropriate. The continuity of provider is important for people with complex needs who cannot cope with having their trusted provider changed for financial or other reasons on a regular basis. The only reason should be that the clinical outcomes are no longer satisfactory.
	I suggest that we need a measure of whether any given change benefits patients. We need criteria against which we can judge success. The amendment has three suggested criteria. The first is to improve the quality of services, including the outcomes that are achieved from the provision. The second is to reduce inequalities between persons with respect to their ability to access services. The third is to reduce inequalities between persons with respect to the outcomes achieved for them by the provision of the services.
	Each of these criteria would admirably test any proposal, but any change meeting all three would have a powerful endorsement to be carried through. To accept changes that meet some but not all the criteria could result in the desired objectives not being met. I suggest that, with the criteria, commissioners will be able to judge whether the providers of choice will be able to collaborate to deliver co-ordinated, integrated care pathways.

Baroness Tyler of Enfield: My Lords, I will speak to Amendment 135CA in my name. We have already had a very interesting debate about what we mean by integration. Obviously, different people mean different things. The sense in which I will talk about integration is how we can encourage integrated care pathways for people who experience some of the worst inequalities in terms of access to healthcare.
	Clause 20 states that the NHS Commissioning Board will encourage integrated working between clinical commissioning groups and local authorities. This is clearly welcome. However, it needs to go further. Those with the worst health outcomes often have the most complex needs and can often benefit most from integrated care. However, as is so often the case, disadvantaged groups can easily be overlooked in the overall system. The fundamental aim here is to ensure that integrated care pathways can be set up that specifically target those with the poorest health.
	I will briefly explain why integrated care pathways are important for those with complex needs. A number of patient groups experience health inequalities. We all know about that, and heard about it in our previous debates. In their 2010 report, the Cabinet Office and the Department of Health identified a number of groups of people who have complex needs and as a result carry a disproportionate cost to the NHS. The report states that,
	"socially excluded people often make chaotic and disproportionate use of health care services, and experience a range of barriers and issues relating to their access and quality of primary care".
	As we know, these groups include homeless people, people with mental health problems, people with drug and alcohol addictions and others.
	I will give a specific example of why this is a very important issue. Homeless people have some of the poorest health outcomes in our communities. I will give noble Lords a couple of facts and figures. Eight in 10 homeless people have one or more physical health need. Seven in 10 have at least one mental health problem. Between 50 and 75 per cent of rough sleepers experience mental health disorders, including anxiety, depression, dementia and psychosis. Research by the Department of Health, again in 2010, estimated that the average age of death of a rough sleeper was between 40 and 44. I find that statistic shocking. Finally, the Department of Health estimated that this had a knock-on cost to the NHS that was four to eight times greater than that of a person in the general population.
	As a result of these patients' complex needs, barriers often exist that prevent them getting the treatment they need. Some services simply exclude them because they are deemed too difficult to deal with-too chaotic or complex. Evidence was found that one in 10 homeless people is refused access at primary care level. Integrated care pathways are crucial to provide personalised and accessible services that treat multiple problems at the same time.
	I shall give a very brief example of how this can really make a difference in practice. The average age of homeless people dying while living in a St Mungo's hostel is just over 40 years. Back in 2009 St Mungo's began an intermediate care pilot at one of its hostels in south London. It was run by a full-time senior nurse and a health support worker. Together they worked with residents to help improve their health and well-being and particularly to prevent unnecessary admission to hospital. They also arranged appropriate discharge from hospital. As a result of this pilot there has been a marked increase in attendance at HIV services, chest clinics, dental appointments and mental health services. Calls to the London Ambulance Service have gone down by 13 per cent and hospital admissions by 40 per cent, which I think is a very significant figure.
	This fits very much with the Government's approach. Indeed, this amendment builds on the commitment to improve the health of the poorest the fastest, which has been part of these health reforms since the White Paper was published in 2010. It also builds on evidence presented by the NHS Future Forum, which stated:
	"We need to move beyond arguing for integration to making it happen whilst also exploring the barriers. We would therefore expect to see the NHS Commissioning Board actively supporting the commissioning of integrated packages of care".
	In their response, the Government agreed that integration of commissioning health and social care should be the ambition for all local areas. The Government have made a number of welcome commitments to strengthen local development of pathways between health and social care providers, and we have heard about some of them this evening. They obviously see an important role for the NHS Commissioning Board working with senates and CCGs in taking this forward. Can the Minister explain how-in achieving better outcomes for those with the poorest health, as is required to reduce health inequalities-the aims of improving integrated working and the health of the poorest the fastest will be achieved in practice?

Baroness Finlay of Llandaff: My Lords, I have several amendments in this group. Amendment 203A has been spoken to fully by noble friend Lady Hollins, who has supported other amendments in this group. Amendment 135C would require a biannual report by the board to the Secretary of State on what has been done to promote integration. The other amendments are all designed to promote collaboration, decrease duplication and bring together primary and secondary care and public health and the diagnostic services to have better diagnosis and management of disease.
	Integrated working allows patients and their carers to benefit from good primary care provided by GPs and others in the team, to have help and support provided by those working in social care, and to access early referral, appropriate investigation and treatment as required from specialist services. Good integrated care needs to see the patients and their experience in the context of their lives, social support, relationships, cultural experience, gender and a range of other factors. Bringing together an integrated social and clinical approach should include holistic plans for diagnosis, treatment, rehabilitation, support and long-term follow-up.
	In their report Teams without Walls, the Royal College of Physicians, the Royal College of General Practitioners and the Royal College of Paediatrics and Child Health highlighted the recommended use of patient pathways as the building blocks for services, with the right balance between prevention, early identification, assessment, intervention and where necessary long-term support. They also pointed out that this had implications for commissioners, providers and regulators of services. Multi-professional working with the patient at the centre of everything provides the opportunity for a wide range of professionals, including those outside an organisation, to monitor care delivery and challenge standards. This will help prevent trusts and professionals from becoming insular. Insular practices can result in negative cultures developing and poor standards becoming tolerated.
	The clinical commissioning groups have quite a challenge facing them if they are really to commission and develop integrated as opposed to fragmented care. Much has been said on this already, and I will not repeat the points made by previous speakers. However, patient needs will be better met if we move to a tariff structure that better reflects clinical complexity. The Government's response to the Future Forum report seems to recognise this, but the current tariff structure overcompensates for simpler conditions and consistently under-compensates for more complex and unpredictable areas of care. To encourage integrated working, consideration needs to be given to a system in which payments are received over a longer term and for the achievement of integration and good clinical outcomes. To do that, it will be crucial for Monitor and the Commissioning Board working closely with royal medical colleges and specialist societies to develop a tariff that will provide integrated care.

Baroness Murphy: My Lords, much has been said on this group of amendments and I will not delay the Committee too much. I have a great deal of sympathy with the plea of the noble Baroness, Lady Thornton, that we should know what integrated care is. We have had several descriptions around the House. We have within the Bill a duty to promote integrated care, so it is important that we have read into the account the Government's thinking on what "integrated care" means. I think that I echo the noble Lord, Lord Ribeiro, in saying that.
	I am surprised that my noble friend Lord Walton, who is not in his place at the moment, did not mention Mrs Smith of 66 Acacia Avenue, or we might have said Mr Chowdry of 66 Mafeking Avenue. What does sitting at home feel like to those patients who are in receipt of community care? How does it work out for them? Integration of primary and secondary care with social care provision is what it really should be about. I look to the Government to reassure me that that is what we are talking about.
	We have to be aware that some barriers in the NHS will require this financial manipulation. On the one hand, there is a profound mistrust by acute providers of the competence of community-based and primary care workers. Sometimes that has been justifiable in the light of the historical deskilling of clinical care that occurs in primary care settings. On the other hand, there is an attitude bordering on paranoia from community and primary services staff about the predatory nature of what Enoch Powell referred to as the "voracious" acute hospital sector, which is entirely justified by their experience of being sucked in to the acute hospital, and especially true since payment by results came in, which has had a really negative effect on this problem. Then there is the wild card of GPs who can suddenly bring to a halt community-based care out of hours, if they feel like it, without any impact on their budget at all. Noble Lords who, like me, have spent a great deal of time putting in packages of care will understand how frustrating it can be when it suddenly comes to a halt and nobody has budgetary responsibility for it.
	If acute and primary care staff and GPs do not trust each other, how will social care hope to get a look-in? We know from many studies around the world-and we have the highest hospital admission rate in Europe-that you can reduce hospital admissions by 60 per cent or so by providing more in cost effective solutions at home to episodes of illness in long-term care conditions. It is crucial that we find mechanisms to produce this integrated care. Normally, a package has to be laser pulses of medical intervention, minutes of special nursing care, and hours and hours of domestic and personal care which is regarded as the ambit of social care services. That means shifting large amounts of money from the NHS to social care providers. We cannot get round that.
	The balance of this investment in a care package is crucial for developing appropriate care services. How are we to achieve that without significant changes in the way that the tariff is constructed? It is not only a matter of unbundling the tariff; it is also about how you bundle in some areas but unbundle in others for particular pathways of specialist and non-specialist care. That is very difficult, and as the noble Lord, Lord Warner, said, there is no good history of anyone who has done it very effectively anywhere in the world. However, as he and the noble Lord, Lord Patel, mentioned, there are some good examples-indeed, there are even some small examples in mental health trusts in this country. They provide capitation funding for an individual's care which is then used to provide care across the whole spectrum of care. That has been used very effectively in mental health trusts which give the budget to community care workers to reduce hospital admissions for a particular client group. That can work very effectively, as it does in Kaiser Permanente. What encourages me about the Bill is that with the right design of capitation funding for clinical commissioning groups, we could quite readily move to that sort of funding as an incentive to provide packages of care that reduce hospital admissions.
	It seems to me that the budget flat-line that we are predicting over the next few years creates an imperative to do this better. Changing demographics also tell us that we will need more health and social care packages, not fewer, so we had better have more cost-effective ones. In seeking a way forward we need to understand what integrated care means to the Government and how this duty will be given teeth, because we need it desperately. There ought to be financial arrangements that can support and develop it. I believe that we can work on this, but I would like to know how the Government currently envisage that we shall do it.

Baroness Williams of Crosby: I listened very carefully to what the noble Baroness, Lady Murphy, said, and I broadly agree with it, with one slight exception. She said that she did not think that there were many examples around the world of particularly good integrated practice and then she mentioned that there had been considerably activity of this kind in some mental health trusts in the UK. I want to throw a slightly more cheerful note into what has been a slightly gloomy debate. As it happens, this morning, a Canadian doctor friend of mine brought to me the latest report of the Commonwealth of Massachusetts study on relationships between doctors and patients. It is a comparative study of 11 medical systems throughout the world. I shall not keep the Committee for long, but I will read a couple of the findings that date from November 2011. It was a major study of thousands of patients-more than 1,000 in Britain, a couple of thousand in the United States and so on-at the time that the report was put together at the end of 2009. I shall be very quick, but I think it is quite remarkable. In patient engagement in care management for chronic conditions, which is something we have been talking about a great deal when talking about integration, the country that comes out the best of the 11 is the United Kingdom. In shared decision-making with specialists, the first is Switzerland, the second-

Baroness Murphy: I am very well aware of the wonderfully heartening Commonwealth of Massachusetts report, but the point I was trying to make is that we are marvellous at health and social care integration in this country compared with many others. Having spent my life doing it, I am quite proud that we can say that we do it better than most. But my point is that if you want cost-effective purchasing of care systems that promote it, we cannot point to anywhere in the world where there are very good, efficient systems. Kaiser Permanente is a very restricted system for its employed clients in California. We do not have the systems that financially promote a drive towards those systems. It is not that we do not do it, but that we do it in spite of, not because of. However, the report is most hearting.

Baroness Williams of Crosby: I would not disagree with the noble Baroness on that issue. I agree with her, but I am trying to make a different point, which is that I think we have been left with, by sheer good fortune, if you like, a much better starting point for serious integration than many other health systems. It relates also to Amendment 203A, which was tabled by the noble Baronesses, Lady Hollins and Lady Finlay, about the role of competition, about which I am rather less confident than some others.
	I shall mention two other findings from the report because it is a remarkable and impressive story. On the doctor/patient relationship, there was a question about how far patients felt that they had close relations with their doctors and the ability to speak to them and to discuss their cases with them. Once again, quite remarkably, the United Kingdom comes out second to Switzerland in the 11. To take a final and very surprising finding in this study, on medical, medication or lab test errors in the past two years, the figure for the United States was 22 per cent, for the Netherlands it was 20 per cent and for the United Kingdom it was 8 per cent. It is extraordinary that we so rarely blow our own trumpet in this country, and very occasionally, we should.

Baroness Thornton: The noble Baroness, Lady Williams, is right. It is a great report, and I have read it. Would she care to join me in speculating about why the department has not made it its headline story?

Baroness Williams of Crosby: I think the answer to that had probably better come from the department rather than from me, but I am consistently surprised by the failure, not of this Government but of Governments of the United Kingdom for a long time, to say what the real achievements of the NHS have been and to recognise that outside this country it is widely regarded as perhaps one of the most outstanding health services in the world. It is worth saying that from time to time because we have 1.2 million people employed in the NHS and they deserve a great deal of the credit for having maintained a high standard in the face of very considerable financial pressures, even in the past. We have always had among the lowest expenditures per patient in the 11 highly industrialised countries with only a couple of countries-Australia and New Zealand -spending less than we do.
	There are two points to this argument. First, we are in a much better place to integrate care than we seem to think we are because we have already clearly established relations of trust between doctors and patients and between hospitals and doctors to an extent that other countries clearly regard as enviable. Secondly, one has to ask why we suppose that competition is a better way to deal with healthcare than are integration and collaboration. There is one area where competition is clearly crucial, and I accept that. It is in innovation and in trying out new ideas. None of us would in any way be opposed to that happening. However, I would like to put it on the record that if we are going to move in the direction of collaboration and integration, we have a very strong base on which to do it and we have the makings of something very impressive and important. The makings of that appear to be stronger in this country than in most others.

Lord Warner: I would not normally have interrupted the noble Baroness, but this canard that somehow integration is incompatible with competition has to be challenged. I refer the noble Baroness to the King's Fund's work on integration and its citing of Kaiser Permanente operating in a competitive market and doing very successful integration. I would also refer her to the peer-reviewed article by Zack Cooper of the LSE in a recent edition of the Economic Journal, which makes it absolutely clear that competition under the previous Government both improved patient outcomes and reduced deaths.

Baroness Williams of Crosby: I have actually gone in to the story of Kaiser Permanente very carefully. It is not surprising that if you choose the very best example in another country you can make a favourable comparison. I am talking about the outcomes for a whole population rather than a particular part of a population. I have said already that there are certainly areas where competition can play a very important part-I referred to innovation and new ideas-but I am simply putting on the record that if you look at the comparison between the health services of the 11 most advanced, richest and most industrialised countries in the world, the combination of integration and competition that we have here appears to have rather better outcomes than in those countries that rely much more heavily on competition such as the United States.

Baroness Wheeler: My Lords, I will speak briefly to my Amendment 135B. Since the Future Forum report, there is a renewed focus on integration in the Bill, and we welcome that. However, as a number of noble Lords pointed out at Second Reading, there is a need to define what we mean by integration. Government amendments largely reinforce the benefits of integration to the NHS rather than looking at the system from the perspective of health and social care, service users and using integration to develop person-centred services. My amendment and others in this group seek to begin to address this.
	Since most people with long-term and complex health needs also depend on social care services in order to maintain their health, well-being and independence, it is crucial that the Bill ensures that measures to increase integration also extend to social care. In the NHS, integration has primarily focused on integration of primary and secondary healthcare and to integrate back office support such as IT, human resources and estate management in order to make efficiency savings. While both of these aspects of integration are important, they will not lead to the system transformation hoped for in the Government's Liberating the NHS White Paper. We need to continue the now reasonably well established place-based approach to integration which brings health and social care together, in which the totality of public resources is directed to develop seamless services which support individuals. As such, they are far more likely to lead to system reform in which all public services focus on achieving better outcomes for individuals and communities.
	Local councils have an established record of commissioning for people with complex and ongoing health and social care needs: in particular, homeless people; people with mental health problems, learning disabilities, AIDS/HIV and dementia; and children's health. It is vital that commissioners of services for people with complex health and social care needs understand the important contribution of housing, leisure and recreation, access to education and other mainstream local authority services to supporting vulnerable people to remain healthy, independent and productive members of the community. Noble Lords have pointed out that clinical commissioning groups will have little understanding or experience of commissioning the complex package of support required. I would therefore emphasise the importance of joint commissioning or delegating commissioning to local authorities and hope that the Minister will respond positively to this.

Earl Howe: My Lords, the subject of the tariff may, to an outsider, seem rather dry but I will begin by saying to the noble Lord, Lord Warner, that I agree with him that it is fundamental to having an effective and efficient health service and better care for patients. Indeed, as noble Lords have articulated so well, this group of amendments takes us to the heart of one of our running themes in Committee; namely, the integration of NHS services, both within the NHS and more widely with social care services. I agree that this is a subject of profound importance. The NHS Future Forum highlighted this while also identifying that some people had real concerns that competition in the provision of NHS services could act against the development of integrated provision.
	First, what do we mean by integration? A number of noble Lords have asked that question The duties to promote integration would cover both integration between service types-for example, between health and social care-and integration between different types of health services. Whatever the combination and however they are integrated, the practical effect should be that services are co-ordinated around the needs of the individual. This duty would apply right the way through the system. It would certainly apply to the board when exercising its functions, not just its commissioning functions.
	I agree with the noble Baroness, Lady Wheeler, who made a very important point about vulnerable people in particular. For example, CCGs could comply with their duty of integration by choosing to commission services jointly with local authorities. We have always envisaged that happening. The joining-up of services could, as I say, be between different organisations or between workers within an organisation or even with advice that is given to patients about self-care and the treatment that is delivered by providing organisations. What matters is that the service is based around those patients, not the other way round.
	It might be helpful if I said something about the Government's approach to competition in the NHS. We are clear that in some circumstances competition is a force for good. Competition can create incentives for providers to innovate and improve effectiveness, as well as enabling greater choice for patients. My noble friend Lady Williams made that point very well. However, there is no single model of competition that will be right in all circumstances. Indeed, in some circumstances, competition will not be appropriate at all. Who should decide questions of this kind? Our view is that it should be for commissioners to decide whether-and if so, how-to use competition to further patients' interests. In doing so, commissioners must act transparently and would need to consider the type of service and the needs and preferences of patients who would receive it, and be able to demonstrate the rationale for their decisions.
	The noble Lord, Lord Warner, made a helpful intervention on this issue. The NHS Future Forum report stated:
	"We have also heard many people saying that competition and integration are opposing forces. We believe this is a false dichotomy. Integrated care is vital, and competition can and should be used by commissioners as a powerful tool to drive this for patients".
	The Government agree. That is why the Bill set out duties for both the board and CCGs on promoting integration when commissioning services. The board, CCGs and health and well-being boards, as well as the regulators, Monitor and the CQC, will have duties to encourage integration and work across health and social care.
	These changes should make it easier to deliver higher quality service pathways of patient-centred care. To help support commissioners, health and well-being boards will provide a forum to bring together people from across the health and social care sectors. Furthermore, the Bill gives the boards a specific duty to encourage health and care commissioners to work together to advance the health and well-being of the people in their areas. I might just mention that we have also asked the NHS Future Forum to consider in more detail how we can ensure that our reforms lead to better integrated services, and its conclusions on that topic will be with us shortly.
	It is perfectly possible to have responsive, joined-up services working in patients' interests and competing for their choice. For example, commissioners could decide to run a tender for a whole pathway of integrated services to be delivered by a single provider. This could encourage providers to bring forward innovative, integrated care solutions that deliver greater patient benefits and greater efficiency. Only a few weeks ago, I visited in Oldham an example of exactly that: musculoskeletal services delivered in the community, specialists from a variety of disciplines situated in one building and accessible to patients directly, and with short lines of communication. It is very popular with the clinicians and patients involved, and is achieving great results.
	Of course, as the noble Baroness, Lady Hollins, pointed out, the extent to which particular services will benefit from both integration and choice will vary. Diabetes networks provide high-quality services with a high degree of integration but limited choice for patients between providers. I am sorry not to have a contribution from the noble Baroness, Lady Young, on this point, but I am sure she would agree. Certain mental health services may be another example of this. For other services, more choice may deliver better outcomes. This is why the provision in the Bill enables services specified in a particular way in the national tariff to be unbundled and paid for separately. That should happen, however, only where this is demonstrably in patients' best interests. The comments made by the noble Baroness, Lady Hollins, in support of her Amendment 203A were very helpful in that context.
	Monitor would have duties to support commissioners by enabling integration through the exercise of its functions. This reflects the fact that, as I have indicated, the driver for integration within the reformed healthcare system must come from clinical commissioners rather than from the regulator. Having said that, we are clear that, consistent with its duty to enable integration, Monitor will have an important role here. For example, the Commissioning Board would specify services for the purpose of tariff-setting, which may include bundling services together or specifying care pathways. Monitor's role would be to devise methodologies for pricing those services.
	I would not want to go further than that and make it a statutory requirement that the tariff could specify services by reference to clinical pathways, as some amendments in this group imply. That would be overly prescriptive and unnecessary. While tariffs for whole pathways of care may be appropriate in some circumstances-and I have mentioned an example or two of this-that may not always be so. For example, it might be appropriate to give patients choice about which provider provided a particular element of their care along a pathway. If the tariff enabled only a single payment for a whole pathway of care, it could deny patients that choice. Hence, we need to retain flexibility within the tariff and remain focused on outcomes.
	My noble friend Lord Clement-Jones spoke with great authority about specialised services. Sir David Nicholson, as chief executive designate of the Commissioning Board, published Developing the NHS Commissioning Board in July, which set out proposals for how the board will operate and how it will be organised. It is envisaged that the initial sub-national structure will reflect the arrangements that have been made for PCTs and SHA clusters. It is envisaged that the field force, as he describes it, will be responsible for commissioning specialised services, providing the flexibility for this to be organised at different levels according to what is most appropriate for that condition. My noble friend was absolutely right to draw attention to the need for integrated pathways of care in specialised services. We believe that we are setting up the structures to deliver just that.
	The noble Lord, Lord Warner, helpfully indicated that the tariff should be based on four main principles: integrated care rather than episodes of care; best practice, not average costs; a full range of services; and particularly the need to avoid costs that did not need to be built in and windfall gains. Those factors form the basis for the new tariff structure provided for by the Bill. Provisions will allow currencies based on integrated services and pathways of care by specifying bundles.
	Monitor will set the costs based on a fair level of pay for providers. The board will be required to work towards the standardisation of currencies, which will enable the extension of the tariff to a wider range of services. What the noble Baroness, Lady Finlay, said about tariffs reflecting clinical complexity was absolutely right. We tabled amendments in another place to prevent providers from benefiting from cherry-picking services, including providing for a fair level of pay and a requirement for transparency in patient eligibility and selection criteria.
	My noble friend Lady Tyler spoke compellingly about addressing inequalities. The Bill does not lose sight of that. The board's duty under new Section 13M, to be inserted into the NHS Act under Clause 20, and that of clinical commissioning groups under new Section 14Y to promote integration-

Baroness Thornton: I am thinking about Monitor, what it is doing and its role as an economic regulator. Why is it the best body to decide on the price, cost and value of things?

Earl Howe: It needs to be a body that is separate from the NHS Commissioning Board. Determining what represents an appropriate price in the system is a very specialised discipline. We think that it will be helpful to have a sector-specific regulator doing that work. I would be happy to write to the noble Baroness setting out our rationale on this, but I make no pretence that this is a complex job. We do not think that it can be done very readily at the local level, although it would not be impossible. We think that local commissioners will need to be supported in this task.

Baroness Thornton: Perhaps when the Minister writes to me, he could explain why it is better that economists and regulators dictate those decisions rather than clinicians.

Earl Howe: Yes, I will. To address the point that I began just now, the board's duty to promote integration specifically requires it to exercise its functions to ensure that services are provided in an integrated way where it considers that this would reduce inequality in outcomes. Those words are very important. That is mirrored by Monitor's duty to enable integration.
	I completely understand the intentions behind the amendments in this group. We have had a very helpful debate. We believe that the duties in the Bill, coupled with the wider levers in the system to promote integration, address the points that have been made. In the light of what I have said, I hope that the noble Lord will withdraw his amendment, although I am sure that this is a theme to which we shall return.

Lord Warner: My Lords, this has been a very helpful debate. I do not wish to keep noble Lords from their supper. I just want to log with the noble Lord the thought that, ultimately, if we look at history, changing the tariff has been a long, arduous job. I ask him to think some more about whether we should give a little more of a push to the work of the board in setting currencies than we have so far. Monitor cannot get on with pricing until those currencies are settled. That is the potential blockage in the system. On that basis, I beg leave to withdraw my amendment.
	Amendment 103 withdrawn.
	House resumed. Committee to begin again not before 9.28 pm.

UN: Specialised Agencies
	 — 
	Question for Short Debate

Lord Hunt of Chesterton: To ask Her Majesty's Government how they can enhance the United Kingdom's role in United Nations specialised agencies through clarifying objectives and better communications.

Lord Hunt of Chesterton: My Lords, in this short debate we are looking at the work of the UK with other nations of the world through the specialised agencies of the United Nations in order to deal with the most serious issues facing peoples and countries today and in the future. I declare a family interest in that my grandfather, Maxwell Garnett, was Secretary of the League of Nations Association in the 1930s. He often used to fly the United Nations flag. For five years in the 1990s I was privileged to be the UK representative at the World Meteorological Organisation, a UN specialised agency. I also declare an interest as a director of an environmental consulting company.
	Many of the agencies-such as those for health, the environment, economics and human rights-originated in the 19th century, particularly those dealing with meteorology, health and communications. They were voluntary bodies then, and much less governmental than they are today, a point that I want to return to later. They were an important element in the formation of the League of Nations Union following the First World War and then became important bodies in the United Nations when that was formed after the Second World War. Indeed, the person who wrote many of the documents for both of them has a statue in Parliament Square-namely Jan Christiaan Smuts. One of the features of the United Nations compared with the League of Nations was that there was a much stronger element of the international body commenting on, helping, interfering with and almost intervening in nations in the interests of adhering to the principles of civilised society and for the benefit of populations. Governments were strongly pushed by regulations to avoid torture, not to starve their people and to respect human rights. The influence also extended into areas that are very important to science, such as requiring member states to provide their people with information important to their safety and well-being, and for economic development, an area which United Nations bodies still find extremely difficult.
	However, I believe that these agencies have made many great achievements. Examples are the reduction of disease through the World Health Organisation, the provision of humanitarian assistance, and providing advance warning of disasters. A nice example of this was that in the 1990s the area of uncertainty about where a tropical storm in the form of a hurricane or cyclone would hit 24 hours ahead was around 220 kilometres. Within a few years, research brought that down to around 130 kilometres. The area of uncertainty was greatly reduced and that led all the countries of the world to use much more accurate methods. In the area of culture, we have all benefited from the World Heritage Sites listed by UNESCO, one of which we are in today, of course. Last year, the United Kingdom's nomination of Charles Darwin's Down House was accepted; and for the information of noble Lords, this year China is putting forward Kubla Khan's Xanadu, which is mainly a grass field, by the way.
	One of the other very important features of the UN system is that it provides standards for business, science and medicine for the whole world. My aim in tabling this debate is to point out that, in my experience and that of many people who have both written and spoken to me, these agencies could achieve much more. The Foreign and Commonwealth Office takes the lead in our involvement with the United Nations. I am informed that the UN department at the FCO is staffed by around eight people, so it would be impossible for them to deal with the 50-odd agencies of the UN, and therefore the government departments take the lead on these issues. However, we could do much more to involve Parliament and interested organisations and to build our contribution. A number of suggestions have been made.
	First, the United Kingdom should provide a report to Parliament about the key objectives of the United Nations agencies and how the UK is contributing to those. There are many important multiagency themes on which the UK has been pressing, such as climate change, food and water, as well as technical issues such as data. One of the frustrations for a scientist in the governmental world is occasionally hearing a civil servant asking, "What have data got to do with policy?". It is a slightly puzzling statement, but the attitude is quite widely held. The role of data is changing all the time and it is no longer just provided by government bodies, it is provided by all sorts of organisations. The United Nations' bodies are in fact being rather restrictive in the way that they handle and think about their involvement with data. The United States is introducing data exchange centres where you can bring data together from many different sources. It is important that UN bodies move in that more open direction. That is an example of themes which such an annual or biannual report could tell us about in future.
	The reports should also tell us about where agencies need to change. The United Kingdom is always very good at telling UN agencies to be more efficient economically and to spend less money, but they are not very good at producing broader, non-financial goals which are, after all, why these bodies are there in the first place. It is important that such a report should describe the areas where there should be changes, though hopefully in a constructive spirit. I fear that there have been some reports by British government departments on UN agencies which widely displease our fellow nations in the UN because they are done in such an unconstructive spirit.
	Even experts have no idea about the emerging issues that such reports could communicate. For example, you probably do not know that there is a UN agency just the other side of the river, the International Maritime Organisation, which regulates and defines the rules for dealing with geo-engineering, which is the study of how we can control climate change. The experiments being planned to put iron particles in the ocean to absorb carbon dioxide are, of course, a very radical idea which must be regulated. Even the Royal Society was unaware, when it was talking about geo-engineering, that this discussion was actually going on here. These big, new and important issues need to be publicised. These reports should also give information on the significant decisions and achievements of these agencies as well as their problems.
	I also want to emphasise the importance of stakeholders being much more involved when there are significant meetings of these United Nations agencies. There is currently some circulation within Whitehall in advance of such meetings, and sometimes to the technical agencies, but there is very little real consultation. I read about how these United Nations agencies started in the 1920s, so when I was head of the Met Office I made sure that we had very wide consultation with many industries and stakeholders. However, this does not always happen. Nowadays, when IT allows these ideas to be circulated, there is much more possibility of that happening.
	My second point is that UK delegates at meetings of these significant United Nations agencies-although they are very responsible and sometimes have other government departments present-hardly communicate back to London at all, unlike those from the United States. They certainly do not communicate with stakeholders online. This is now perfectly possible, because there are many public sessions of UN agencies which could be reported. They are in fact being reported online. I can see many meetings, such as a recent one on biodiversity, as they happen on my BlackBerry. This is not courtesy of the United Nations or any Government; it is courtesy of the International Institute for Sustainable Development in Canada. I can see what is happening in many parts of the United Nations on my BlackBerry, which is extremely helpful. I can then send e-mails to somebody to say, "Why don't you do this, that or the other?". This is clearly the new world that we are in. I am sorry to say, however, that when I spoke to a colleague in the Foreign Office, she said that she did not have a BlackBerry and therefore would not know what I was talking about.
	I know from personal experience that reports are sent to the Foreign and Commonwealth after meetings. Most of these are not secret but they are nevertheless classified as such, so if you want to read what happened you have to wait 30 years. It would in fact be perfectly possible to have these reports done openly. I wrote a report after the WMO congress in 1995 at which we talked about developments in meteorology and how it should be applied to this, that and the other thing. It is now in a file somewhere and you can read it in 2025. This is not how we should be dealing, and it is moving on very slowly, I am afraid.
	One of the puzzling features about the UK's involvement in these agencies is that it is not at all clear why certain government departments are in the lead and how they participate with the other lead departments. For example, I have had considerable concern expressed to me by scientific bodies about the fact that UNESCO, which has a wide range of interests-cultural, scientific, educational and so on-is responsible for important programmes in oceanography and hydrology, as well as culture. The government department in the lead for UNESCO is DfID, which is of course a very responsible and well known department. However, while it is pretty good on economics and development, it is not so hot on those other areas. It is not at all clear that communication on these matters is taking place.
	There has to be more effective collaboration, not only between government departments but between industry, NGOs and scientific institutions. Some research councils, whose scientific work I admire, employ the United Kingdom technical representatives at certain UN agencies, but their significant role is poorly understood by the senior management-I shall not name names. Most of the senior management either do not know or do not meet the UK representatives and do not regard it as important. I believe that representing the United Kingdom at a United Nations agency is a very important and responsible role, and it is absolutely essential for senior managers to know who is doing it and to make sure that they report to them and that there is some dissemination afterwards.
	This brings me to another of my points. I believe that the Foreign Office-

Baroness Verma: My Lords, I must remind the noble Lord that this is a timed debate. I am terribly sorry, but he has had 10 minutes.

Lord Hunt of Chesterton: Well, that is almost the end of my shopping list. I thank noble Lords very much indeed.

Baroness Falkner of Margravine: My Lords, it is my pleasure to follow the noble Lord, Lord Hunt of Chesterton, in this wide-ranging review of the UN agencies and I congratulate him on securing this short debate.
	In the 60 years since the formation of the UN, we have come a long way, going much further than the original conception of forming an organisation for maintaining peace and security through mutual guarantees of political independence and territorial integrity to great and small states alike. The specialised agencies, numerous as they are, have come about as Governments have realised that some of the most pressing problems of the world are not capable of resolution through the exercise of bilateral co-operation alone.
	Winston Churchill saw that in his advocacy of concentric circles, which included the countries of empire, the alliances of Europe and the strategic north Atlantic interest that the UK was dependent upon after the war. So pooling sovereignty to the extent that we have in multilateral organisations is not something new. Yet in the UK, a founding member of the UN, it is becoming increasingly fashionable to knock the UN and its agencies except when we need them. At that point, the same people lament their inability to do whatever we want them to do at that particular time.
	I welcomed the Government's multilateral aid review earlier this year as an extremely useful exercise in evaluating our relationship with the UN specialised agencies and in taking forward a new approach. I want to make just three broad points in relation to these bodies.
	The first is that while an individual member Government can do well to review the effectiveness of an international organisation-and I want to put it on the record that I think the multilateral aid review did an excellent job-it nevertheless brings to that exercise a narrow prism of sight, hence the review was commissioned to assess the value for money of UK aid funding for those organisations. I accept that the criteria related to strong behaviours which are capable of measurement-in this case, organisational strengths and contributions to UK development objectives-are entirely worth while. Any keen observer of UN agencies will not have been surprised to see that the list contained few surprises, and those that performed poorly or were merely adequate were those that had had a poor track record for some time. It was also not particularly surprising to see that they shared some similarities in weaknesses: a lack of a sharp focus on their mandate; an overly bureaucratic administration, which caused delays; inefficiencies built into the system; poor cost controls; and references to poor leadership and thereby, implicitly, to poor governance.
	They are all areas which, were they to be found in corporate life or indeed in government, could be resolved through process and management change. However, the very essence of multilateralism-of being beholden to multiple stakeholders-makes consensus on change an extremely challenging task. Most countries can agree on what they think is wrong, but it is far more difficult to agree on what they think they want from that organisation going forward.
	I refer back to my own experience at the Commonwealth Secretariat where we were constantly being pushed in one direction by a particular group of countries, and in another direction by another group. I think it is fair to say that when one thinks of the failure of the Commonwealth to resolve the political situation in Zimbabwe, it was not a failing on the part of the organisation but the lack of consensus on the part of its key members to be able to see a way forward which prevented effective action at the time. I use this example to suggest to our Government that achieving change in the direction we seek will be more easily delivered if we work across the other groups of stakeholders in a diplomatic and consensus-building fashion-sotto voce rather than megaphone diplomacy.
	My second point is related and concerns the more practical aspects of cost controls and building efficient and transparent systems. There is a crying need for reorganisation of the governance of these bodies if they are to carry out their mandates. Some have overly cumbersome executive boards, overstaffed senior levels that have been in post too long, and a general risk aversion, which makes new learning more difficult. While we want lean and efficient structures, we the member countries do not accept that a quota system of recruitment actually works against the most high-calibre candidates.
	If one is to take leadership changes at the IMF or World Bank, it is not an edifying spectacle in a global economic crisis to see a jockeying for position for the top job, not on the basis of merit but on the basis of whose turn it is. It also leaves the population of countries that do not "win" that post with the impression that the officeholder will from now on be partisan. This cannot possibly encourage confidence in those bodies. On the board, Buggins's turn results in compositions that may not be fit for purpose. At executive level, the need for geographical balance may well deliver a less than optimal workforce. I urge like-minded countries to work with the Secretary-General and director-general to streamline board and human resource practices to reflect a stronger emphasis on merit, to the exclusion, if need be, of the requirement for geographical balance if the case is strong enough.
	A further point is about the location and mandate of UN agencies. A good example of a body stifled from birth is that of UNEP. By basing it in Nairobi, it was hampered from the outset by the fact that it was cut off from the rest of the UN system geographically, and it struggled to recruit the highest calibre staff. In keeping with a somewhat lower status as a UN programme, it has had one of the smallest budgets within the system. Given that it is expected to look after a range of environmental issues, from climate change to biodiversity, water and ozone depletion, it is overstretched and underresourced. Given those constraints, it does a remarkably good job.
	Let me turn now to one of the priority areas identified by the MAR-that of programmes supporting the empowerment of women and girls. Last year saw the creation of UN Women. Its full title is the United Nations Entity for Gender Equality and the Empowerment of Women. The reason it is an entity, we are told, is because its mandate is cross-cutting across other UN bodies to cover all themes related to women. It has strong leadership in the appointment of its first head, Michelle Bachelet. Its mandate is wide-reaching, so it was a little surprising to see that Saudi Arabia, that leading example of gender equality and empowerment, was voted on to the executive board. It came in in an obscure category of,
	"developing country not on the Development Assistance Committee of the OECD".
	It stretches the imagination to think of Saudi Arabia in the context of gender equality but it also stretches the imagination to see it as a developing country. I wonder why it is in the G20 in that case.
	I know that my noble friend will be prevented from commenting on this aspect of less than good governance because of diplomatic protocol, but I raise it to illustrate how we the member countries need to build smart alliances with other like-minded players to prevent perverse outcomes which simply heap ridicule on bodies which have important roles.
	The UN agencies operate in challenging environments and perhaps our expectations of them are too high. However, as the multilateral aid review points out, it is our obligation to secure the best possible outcome for UK taxpayers and we must continue to press for our reform priorities if we are to maintain public confidence in the UN system, which it benefits us to do.

Lord Judd: My Lords, while I congratulate my noble friend on his initiative in securing this timely debate, I must also thank UNA-UK for the very helpful briefing material that it has provided.
	In our now completely interdependent global community, the value of effective international co-operation cannot be overstated. It is essential to generate a real sense of community and of shared challenges and shared objectives in meeting those challenges. We must be ready to learn from each other and avoid counterproductive dangers of competition for influence and power as part of which we may be tempted to misuse our aid programme. That is why the UN agencies, with their representative global membership, are so important. However, I am certain that to fulfil their potential it is essential to improve their integration and co-ordination.
	I will concentrate in this debate on three vital agencies facing actual and potential shortfalls in funding. These are agencies that would particularly benefit from strong UK support, financial and political. The UK is on the governing board of all these three agencies.
	The first is UNESCO. UNESCO is currently facing a shortfall of at least $65 million and has been forced to temporarily halt some activities as a result of the sad US decision to withhold dues following the acceptance of Palestine as a UNESCO member. Two US laws enacted in the 1990s prohibit the funding of any bodies that admit Palestine as a member. Therefore, the US is not paying the dues that it owes for this year of $65 million and has suspended future funding. The US normally contributes 22 per cent of UNESCO's budget. Israel has also frozen its contributions and Canada has indicated that, while it will continue to pay its regular dues, it will not provide any additional funding.
	I warmly congratulate the Government, who have just been elected to UNESCO's executive board, on having indicated that they will not cease funding. The UK could play a significant role in supporting UNESCO during this period. I know that the agency scored poorly in the March 2011 DfID multilateral aid review, but its funding was not cut because the review confirmed its unique contribution to education, development, science, culture and heritage. The agency has since undergone a reform process that has seen, among other things, a stronger focus on girls' education. The UK should work closely with other executive board members to ensure that UNESCO improves its performance and to encourage other states to plug the funding gap.
	The UN Population Fund, which is the UN's lead agency for population matters, reproductive rights and family planning, is also coming under fire in the US. Pro-life Republican representatives have blocked the Senate Appropriations Bill which contains the US voluntary contribution to the agency. The fund categorically states that it does not promote abortion and nor does it espouse coercive policies such as China's one-child policy, a claim made by the agency's critics in the Senate. The agency of course had its funding frozen during the George W Bush era, even though a 2002 State Department investigation absolved it of these charges. President Obama reversed the decision in 2009. Over 90 per cent of the agency's funding is voluntary.
	This year, the global population breached 7 billion people. An estimated 215 million women who wanted to delay or avoid pregnancy were unable to afford or access contraception, and half a million women and girls died from childbirth-related complications. The fund's work to support family planning and safe motherhood, and to provide essential information on population trends, has never been needed more. Given the UK's strong focus on women's and girls' health, it is imperative that it does all it can to support the fund's work, both financially and politically. As with UNESCO, the UK is in a key position as a member of the agency's executive board.
	UN Women, the new UN agency for gender equality and women's empowerment, began work this year. In the past, the four main UN bodies working on gender issues lacked the cash, clout and co-ordination effectively to champion equality and empowerment. UN Women consolidates these bodies, absorbing their mandates and acting as a voice and focal point for gender issues within and outside the UN system. In 2010, the UN General Assembly agreed a budget of $500 million for the new agency-far short of UNICEF's $3 billion, but significantly more than the combined budgets of the four previous gender entities, one of which of course was UNIFEM. However, the agency has faced a severe shortfall in funding from the outset-just 1.4 per cent of UN Women's budget comes from the UN's regular budget, and, six months into operation, it had received a little more than a fifth from member state contributions.
	The UK's decision to provide UN Women with £10 million a year for the next two years is to be warmly welcomed; but it is essential that the UK-which is on its executive board-reviews whether there is more it can do, both financially and politically, to support this new agency. UN Women is not only a vital tool to further the UK's gender and development priorities but a flag bearer for improved UN co-ordination and reform.
	The current world situation, of which the Arab spring is a telling example, means that the ILO is potentially a particularly relevant player in global affairs. I am therefore glad that the UK Government will remain a member and that our basic dues will continue to be paid. However, I am deeply concerned that DfID is no longer to provide additional voluntary funding. This averaged £6.6 million from 2006 to 2010. I fervently hope that it is not an inflexible position, and that DfID will indeed continue to contribute funding for specific in-country projects on a case-by-case basis.
	There is room for some concern, lest the criteria used for the multilateral aid review might not always have reflected the remit and mandate of some of the UN agencies under scrutiny. For instance, the criteria appeared to be weighted towards shorter-term interventions in the poorest and most fragile states. Those are utterly worthy and proper objectives in themselves. However, many of the agencies-for example, the FAO-place more emphasis on medium to long-term development. Others have also had wide-ranging programmes that cannot be classified as aid and mandates to operate in developed as well as developing countries. That has always been their purpose. Are we really changing our basic attitude towards organisations that we helped to found?
	As I said in my introductory remarks, international co-operation is absolutely essential to our future. The Government seem to be taking a positive and responsible position. If we can spur them on to put even more muscle into the international dimension of policy, particularly as the economic situation recovers-we hope-the better it will be and the more it will deserve support from all parts of the House.

Lord Liddle: My Lords, we all owe a debt of gratitude to the noble Lord, Lord Hunt of Chesterton, for initiating this debate in this rather late dinner break. It has provided us with food for thought, even if we will not get much real food later as a result of it.
	The noble Lord, Lord Hunt, reminded us what a visionary concept the United Nations was, coming out of the Second World War, and how it saw the problems of the world in terms not of a narrow diplomacy of interstate relations but of global issues that needed to be tackled collectively. That logic has grown more powerful, not less, over time, given the collective action deficits in areas such as climate change with which we now have to grapple. Therefore, the logic of UN agencies is very strong. As the noble Lord, Lord Hunt, reminded us, there are many achievements. As the noble Lord, Lord Judd, reminded us, those agencies tackle many difficult issues of central concern such as population and the rights of women.
	Britain should strongly support this kind of multilateralism because we should aim to maximise our impact in the world through a pooling of efforts. Multilateralism through the UN has a special legitimacy. I am sorry if this sounds like a political point in a partisan debate, but given the Foreign Secretary's talk of restoring traditional diplomacy is there not a risk that we are devaluing the importance of multilateralism and the good that it can do? I speak particularly of the United Nations in that context. Britain has always believed that it can punch above its weight in the world. We can and we do, but all the time, as economic power is shifting away from Europe towards the East and other parts of the world, that weight is declining and punching above it is less effective.
	It is a mistake to prioritise traditional bilateral diplomacy at precisely this time when what we need is more multilateralism, so we should strongly support the UN agencies. It is easy to criticise some of the aspects of their management. I welcome the multilateral aid review that DfID has carried out. DFID, of course, approaches these issues from its own distinctive development perspective. There are arguments for agencies that concern not just international development, as the noble Lord, Lord Hunt, pointed out. For instance, the work of the ILO in promoting decent labour standards is absolutely fundamental if we are going to maintain a world of free and fair trade. It needs to be developed. It does not often deal with the problems of the very poorest countries, but it does deal with issues that are vital if the legitimacy of the world trading system is to be maintained.
	Let us not knock the UN and its agencies, and let us not apply too narrow criteria in assessing their work. The UN for all its imperfections is something on which we need to build. Of course we should have a credible policy for reform, but I do not think that we can lecture the rest of the world about the need to reform the UN agencies when we take such a negative view of reform when it comes to the management of economic institutions such as the IMF and the World Bank. It gives us no credibility to call for reform in other areas.
	We will not get very far simply by lecturing people from the outside. We have to work with people on a reform agenda who share our concerns. In particular, we have to try and identify the best people for top management positions, and we should offer to support those people on merit and not on nationality, as the noble Baroness, Lady Falkner of Margravine, has said.
	My noble friend Lord Hunt emphasised that we should press for greater transparency. His key recommendation was that we should have regular reports to Parliament on the work of the agencies, and that documents to do with the agencies should not be secret documents but should be publicly available. I would welcome the Minister's views on these topics tonight. Are the Government looking into providing greater transparency? We should certainly be pushing for clearer objectives for measures of success, for accountability in spending and all those things. However, let us first carry that out in practice domestically, as my noble friend Lord Hunt has recommended.
	We have had an interesting debate here. The UN agencies fulfil a vital role, and while pressing for reform we should be strong supporters of them as well.

Lord Wallace of Saltaire: My Lords, I was not entirely sure what to expect from this debate. There are a great many agencies, boards and programmes in the world. I remembered when I started to read the briefings beforehand that I used to teach a course on international organisations at the London School of Economics. As I discovered, the students were hoping that this course would help them to get good jobs in international organisations. It evolved over the years into a course that, as I told them in the first lecture, was intended to dissuade them from joining an international organisation.
	I did my best to explain the structural problems that all international agencies unavoidably suffer from, and the necessarily good work that they do in some rather difficult circumstances. As the noble Lord, Lord Hunt, pointed out, functional agencies long pre-dated the UN. Some of them were 19th century agencies such as the Universal Postal Union and some riparian bodies. The International Labour Organisation was founded just after the First World War. Then the United Nations sponsored and provided a degree of accountability for a whole generation of new bodies. There are now a great many. Unfortunately, some duplicate each other's activities and there is some overlap.
	That is part of the problem of assessing how valuable they all are. I recall that the FAO, the World Health Organisation and UNESCO had enormous problems in their secretariats and in their effectiveness 30 or 40 years ago. All agencies have suffered from American ambivalence. The Americans wanted agencies to serve the global good, as the United States saw it, which meant, in those days, opposing the Soviet Union; and Russian, Chinese and Saudi ambivalence has been a problem for many years. Agencies are unavoidably imperfect, even more imperfect than national Governments. Recruitment and appointment is part of the problem. The noble Lord, Lord Liddle, said that we should find the best people on merit, not on nationality. He knows very well from his time in the European Commission that that does not apply even in the European Union. It is much harder to apply in organisations that have well over 100 state members and in which the Finance Minister of a particular country wants to get his nephew into a really good job, or the President wants to get his son into a really good job. Those are the problems with which we have to deal.
	There are also perverse outcomes, as the noble Baroness, Lady Falkner, has pointed out, not just in UN Women but on the Human Rights Council, with which, in this imperfect world, we have to deal. I can recall taking part in a conference associated with the UN Convention on the Law of the Sea, in which I dared to crack a joke about the Iraqi approach to a number of matters, whereupon I was immediately denounced by the Iraqi delegate at this informal conference and an official apology was asked for. One has to be very careful how one behaves in international bodies.
	The United Kingdom is an active and major player in this complex world. We provide between 6 and 7 per cent of contributions to these various agencies and our contributions are rising. The United Kingdom is now the largest contributor to international agencies in Europe. As the United States becomes a more ambivalent player, in a number of ways we are becoming more important; we are an engaged player. I hope noble Lords agree that the multilateral aid review was a very constructive assessment of the limited effectiveness of a range of different bodies. It was extremely complimentary about the effectiveness of some and constructively critical of a number of others.
	The noble Lord, Lord Judd, whom I think I remember first meeting at a UN association meeting a very long time ago-

Lord Judd: A very long time ago.

Lord Wallace of Saltaire: -when I was young. The noble Lord talked about the problems of a number of agencies, in particular UNESCO, with the loss of US funding and with the United Kingdom having just been elected to the executive board. UNESCO continues to have a number of problems with effectiveness. This new blow will be an additional one, but we also recognise that UNESCO carries out a number of functions that are not provided by other international agencies, and it is in all our interests that those functions continue to be effectively provided.
	I should perhaps admit to a very small personal interest; I was rather upset that the noble Lord, Lord Hunt, did not point out that Saltaire is also a world heritage site. I hope that he will visit it soon.
	The UN Population Fund is also under fire from the American right, but that is not a new story. Agencies have been under fire from the American right for as long as I can remember. The Cold War had even more attacks of that sort. The UK is again playing a constructive role on the executive board. UN Women, a reorganised body, is too young for us to be able to see how effective it will be, but we are giving it our full support.
	The International Labour Organisation, on which the noble Lord, Lord Liddle, commented, has a number of problems. Only 40 per cent of its staff are currently working in the developed world. The International Labour Organisation, as the noble Lord, Lord Liddle, will know, has negotiated and agreed a very large number of conventions on aspects of labour, many of which still lack enough national ratifications to be carried into practice. There is a limit to how useful it is to design things on child labour, and other such things, which are not then carried through to ratification and implementation by the majority of the members of the organisation.
	The noble Lord, Lord Judd, thinks that we are a little too critical of the Food and Agriculture Organisation. I would suggest that we remain constructively critical of an organisation which has been in deep trouble in the past, and is now improving but has some way to go.
	Noble Lords asked about the British approach, and how far Britain should press on its own for improvement. Of course we should work with others, and we do. One of the pleasures of my work in Government, as someone who goes to regular Foreign Office ministerial meetings, is to hear how frequently the Foreign Secretary says, "Well, the most important thing in this is that we must work with our European partners to maximise our influence in X, Y or Z". Of course we do that. We work with all of the partners we can do-European and Commonwealth-through as many networks as we can. However, we often discover that the Western caucus within these organisations has to be careful not to upset what is still seen as the G77 caucus and that tensions within these agencies about who tells who what to do remains a source of problems. The question of who pays, and who does not pay, is a rather different thing. The multilateral aid review, as a national contribution, was a constructive contribution. It provides a basis from which we can talk to other Governments about what needs to be done.
	The noble Lord, Lord Hunt, talked about reports to Parliament and parliamentary oversight. He may recall that there have been suggestions in this House in the past four or five years that we might experiment with an ad hoc committee on international organisations which might look at the how Britain relates to international agencies and which ones provide us with the best value for money. That suggestion might again, if he wishes, be raised with the Liaison Committee.
	It is right that the British Government should be asking, since we are a major contributor, what value for money we receive from these bodies. Since we are on a rising curve in our international aid budget, and in our contributions to these organisations, we have to have some concern about public acceptability. Perhaps not every noble Lord in this Chamber reads the Daily Mail with as much attention as I do every day, but the Daily Mail is not an enthusiast for rising British contributions to international agencies. It is not enormously enthusiastic about international agencies as such, be they the European Union, the FAO or the UN Population Fund.
	The noble Lord, Lord Hunt, talked about the balance between the FCO and other departments. These are functional agencies and it is therefore proper that the functional departments should provide the lead. A lot of the work, particularly that of some of the environmental and meteorological agencies, is highly technical and expert and there is an expert community, particularly in the climate change world, which works with the Government and with their counterparts in other countries to progress the work that is underway. The FCO does not attempt to duplicate that work. It has a small department which co-ordinates what others are doing and works with them through our representatives and our delegates in those various agencies when they meet. Engagement with outside experts and lobbies is high. At the UN conference on climate change, the number of British lobbies represented has been astonishingly high. It is not something that takes place behind the scenes.
	I say to the noble Lord, Lord Liddle, that I do not see the contradiction he suggested between prioritising bilateralism and downgrading multilateralism. We are doing both and it seems to me that the stronger one's bilateral relations, the stronger one's multilateral relations can also be. We are working with others to try to improve these organisations. Building coalitions within organisations such as the European Union, the Commonwealth and many other global organisations seems to be the way forward.
	I end where I started. These agencies will never be perfect. As we all know, internationalism suffers from structural problems. We have our own ideas about how the world should be organised and how agencies should be organised, which are not always shared by the Governments of all other countries, so we have to work with them.

Lord Liddle: Will the noble Lord give a commitment to consider the proposal of the noble Lord, Lord Hunt, for a regular report to Parliament and greater transparency?

Lord Wallace of Saltaire: I will gladly commit to considering that. The British Government, here as elsewhere, are very concerned about transparency. I apologise: I should have taken up the point that the noble Lord made about transparency of data. Data are extremely important in many of these areas. We are doing our best to provide better data. In the multilateral aid review, a great deal of emphasis was placed on how much data are available about the effectiveness of work on the ground, in-country, by particular agencies. That is very much part of the way forward.

Lord Hunt of Chesterton: Could there not be a commitment to be more IT? We are in an IT world and I would like to be able to read more stuff from the Foreign Office on my BlackBerry. How about that?

Lord Wallace of Saltaire: I promise to write to the noble Lord on that. I have now extended my time. In spite of the fact that we are running a little short, I should probably draw my remarks to a close. Again, I thank the noble Lord for raising this issue. We ought to spend more time looking at how international agencies work. They play a very important part in holding the world together and I agree with him that we pay much too little attention to the work that they do and to assessing its quality and how it might be improved.
	Sitting suspended.

Health and Social Care Bill

Main Bill page
	19th Report from the Delegated Powers Committee
	18th Report from the Constitution Committee

Committee (7th Day) (Continued).

Amendment 104
	 Moved by Lord Warner
	104: Clause 20, page 17, line 14, at end insert-
	"( ) In discharging its duty under this section the Board shall, after consultation with Monitor under subsection 171(4) and the appropriate clinical commissioning group, advise the Secretary of State whether or not the NHS service configuration in a particular area is financially or clinically unsustainable within the mandate issued or proposed to be issued by the Secretary of State."

Lord Warner: My Lords, this is probably not the best time of night to be concentrating on this set of amendments, because it brings us to the difficult and controversial issue of service reconfigurations. Let me start with why I think that we need to move upstream from the full-scale failure regimes which are provided for in this Bill, and with why I do not consider that one can rely totally on local commissioners and elected Health Secretaries to undertake the scale of service reconfiguration that the NHS requires, or as quickly as it requires. In making that statement I start from a position that the best predictor of future behaviour is past behaviour. In the field of service reconfigurations past behaviour has not been a speedy or easy process to start, let alone finish.
	I do not want to spend long on why it is urgent, but the essence of this is the Nicholson challenge, which is £20 billion of productive improvements in the NHS in the four years to 2015-16. As the Health Select Committee has pointed out, no health system in the developed world has ever delivered this level of productivity. To say that it is a big ask is a masterpiece of understatement. The NHS's track record on productivity improvement is, putting it at its best, modest, so we are dealing with a difficult set of issues, on top of which there are constant pressures from demography, advances in science and rising public expectations in the UK healthcare system and, indeed, in virtually every advanced healthcare system. That is what confronts the NHS.
	It is crystal clear that the public and politicians are beginning to recognise more openly that the historic patterns of service provision built around district general hospitals do not meet current or future healthcare needs. They certainly have a capacity to gobble up resources without necessarily delivering the type of services that many patients of the NHS need and which could be delivered more cost-effectively but probably not using the present pattern of hospital configuration. What that means its that we are facing a situation where in many parts of the country we have to change those hospital services very rapidly indeed, and we have to make some painful decisions on those service configurations, which can often mean closing some services, doing some services in a different place, redeploying and retraining staff and, in some cases, in all probability making some staff redundant. That is why this is contentious territory and why it has proven difficult to do. We are now moving towards a financial situation where we cannot put off the job of reconfiguring these services much longer.
	The difficult problem we have in the way this Bill is structured and in the way we are approaching this is that we are expecting this painful stuff to be done in a situation where we are saying that local clinicians and local people have got to face up to these difficult decisions. They have got to start the process, unless it gets so bad that Monitor is required to trigger a failure regime. In many cases, the problem manifests itself in an acute hospital, but often you cannot solve the problems of that acute hospital without looking at the wider health economy within which it is situated, so we have a situation which is asking quite a lot of local clinicians, certainly based on experience, to start the process of reshaping those services however right it is in principle to expect local people to take the initiative in these areas.
	Historically, we have faced a situation where elected politicians in the form of MPs have found this extremely difficult territory-whether they are going to be Kidderminstered, or whether they are going to find themselves having a very small majority and feeling honour bound to carry a placard around outside the local hospital without making a change. That is not a criticism of them; that is a fact of life. Asking local elected politicians and local people to, in effect, fall on their sword to some extent in relation to changing these hospital services is a big ask. This amendment tries to face up to some of those realities. It suggests that waiting for things to fail, to get so bad that they trigger the failure regime, is putting Monitor in a pretty tough situation.
	This amendment tries to move upstream from that and to advance the argument that Monitor, with the support of the national Commissioning Board, should be able to look upstream and see the hospital services that are heading towards failure-in this case, I have taken a period of 12 months before failure-and start to do something about it. In co-operation with the national Commissioning Board, Monitor could trigger an independent panel to work with local people to come up with a set of proposals for reconfiguring services within a reasonable timescale set by Monitor that would make those services sustainable financially and clinically for the future. That is not to say that local people should be excluded but we should have a trigger that brings in some facilitation to help them get there.
	Fast-forward, then, to the end of that process. We have often talked about the Chase Farm example. Seventeen years is a bit of a long time to sort out an A&E department, but that is what it has taken. My noble friend Lady Wall is still struggling with what comes next. We have to have something better than that. Elected Ministers are also constituency MPs. They understand the problems that some of their colleagues face. Sometimes they even understand the problems that their opposition colleagues face in these situations. It is not surprising that they find it difficult to take decisions quickly, even armed with the current independent review panel. No stone is left unturned in trying to give local people an endless chance to stop progress. We call it public consultation but it is in fact a stopping of progression of the reconfiguration.
	What my amendment also does is to say, at the end of that process, that the Secretary of State cannot be taken out of the loop, but if he is going to turn down this independent panel's set of proposals for making services sustainable clinically and financially in a given area, he has got to give his reasons to Parliament for doing that and has to come up with an alternative proposal for making those services sustainable. That is why I think we badly need a process of this kind where there is a trigger, some independent facilitation and some lock on the ability of the Secretary of State to endlessly procrastinate or avoid taking a decision coming out of an independent panel.
	I am the first to recognise that this may not be enthusiastically received by the elected political class. It is probably a bit much to stomach appointed Peers proposing this idea. However, I am putting this forward on a non-partisan basis in the hope that we can move forward in this area on a basis similar to the one that I am proposing. At the end of the day what I am doing is pinching something. This is not a totally original thought. I am pinching it from Canada's experience, where in the 1990s the healthcare system in Ontario was literally going broke and they had to find a way of not bypassing the elected political class but facilitating a set of changes that made it easier for elected politicians to take difficult decisions. That is the purpose of this amendment and I move it in that spirit, as a constructive attempt to deal with what I acknowledge is an extremely difficult and complex problem. I beg to move.

Lord Hunt of Kings Heath: My Lords, we are indebted to my noble friend for raising what I think is one of the most difficult issues the health service is going to face. There is no doubt that if the efficiency challenge is to be met, there has to be a major reconfiguration of services. Yet, as my noble friend has said, we know that this is often very difficult to undertake and get local sign-off. Both my noble friend and I enjoyed-if that is the word-experience as Minister for the health services in London, and both of us have been involved in some of the agonised discussions with the outer-lying hospitals and boroughs. The whole London area is littered with proposals that have been made for many years and which have not been put into effect. There are other examples up and down the country. The problem is that the health service no longer has the luxury of being able to rely on the uncertainties that are caused by the current system. Reconfiguration needs to take place, and rapidly, over the next two or three years.
	I am enormously sympathetic to my noble friend's amendment. It is interesting that in our previous debates the view has been expressed that ministerial intervention has often caused the problem. My noble friend would still push this substantive decision back to the Secretary of State. That is probably right, because in the end, however much the Government might wish to push this back onto the health service or onto the NHS Commissioning Board, I should have thought that the interest of MPs in reconfiguration issues would have sucked the decision back to the Secretary of State one way or another. We have to assume, therefore, that any process that is put forward does involve the Secretary of State.
	I have no doubt that the noble Earl will say that we do not need to go down this route and that he is confident that clinical commissioning groups will be able to embrace reconfiguration of acute services and get sign-off from the appropriate or relevant local authority. I am sure that there may be some areas where that might happen, but of course, one has first of all to recognise that if a major reconfiguration is proposed, it will involve a number of clinical commissioning groups. The first test will be whether a number of CCGs will be able to come together to achieve a strategic outcome. Secondly, even if that happens, those clinical commissioning groups have yet to feel the heat of battle. They may well theoretically sign up to a reconfiguration, but they are inexperienced, I would suggest, in the kind of pressure that they will come under from politicians and the public. I suspect that one or two will find it very difficult to hold the line.
	The other problem with the current proposals of the Government is that clearly they wish the NHS Commissioning Board to have a leadership role. However, the Commissioning Board will have much less legitimacy than Ministers when it comes to controversial decisions such as closures of accident and emergency departments. It is easy to see how these may come, in the end, to little fruition.
	I certainly support my noble friend. The only question I put to him is whether his process is really tough enough. I wonder whether what really needs to happen is that every area of the country should be reviewed by some kind of independent body as to whether the configuration of services is safe and appropriate. It no doubt could have examinations in public, similar to the old strategic planning process that we have had in the planning system. I would favour a much stronger statutory approach to this, which forces each health economy to come to the table, to put their viewpoint, but then to have an outside group of experts who would then make strong recommendations to the Secretary of State. I fear that without such external views we will find it very difficult to make progress. I suggest to my noble friend that he should consider whether he might need something stronger to make this bite.

Lord Warner: I never thought that I would be outflanked on the Stalinist wing of the Labour Party by any Member of your Lordships' House, but clearly I have that all wrong. I would be happy to strengthen these proposals because I rather share my noble friend's view that I may be being a little wimpish here, but I was deferring to the elected politicians on this, probably unwisely. I am producing this rather wimpish proposal, but somewhere along the way we certainly have to have a trigger that is independent of the political process. We need some outside facilitation of change with the local people and we have to restrict, to some extent, the ability of elected Ministers to totally undo or avoid taking decisions in this area, possibly as much as my noble friend is saying.

Baroness Cumberlege: Those words are so warm to my heart, I cannot tell the noble Lord how much. One of the things that really concerns me is delay. I am worried that if we get this outside group it will delay matters, because some of this is very urgent at the moment. What is the relationship between this and the independent review panel-I am not sure what it is called-which deals with hospitals at the moment?

Earl Howe: It is the Independent Reconfiguration Panel.

Baroness Cumberlege: I am indebted to my noble friend for that. Does the Independent Reconfiguration Panel play a part in this? Is it something different? Do we have to go through that as well, in which case it will take even longer?

Lord Warner: Something equivalent to the Independent Reconfiguration Panel was used earlier in the system. It was put in to bat with the local area by Monitor when it saw trouble coming down the railway track in the form of failure. I envisage that a standing group of people would be approved to work in this area, which Monitor would be able to assemble very quickly. My amendment proposes that a timescale is set for this panel to work with local people and to come back with a solution to the problem, but I think that more people than are currently approved for the reconfiguration panel will be needed because of the points made by my noble friend. In many parts of the country we are likely to have to intervene quite quickly because we have spent a lot of time over the past 10 or 20 years putting off decisions about some of these places. A lot of these places will come to Ministers, the national Commissioning Board and Monitor over the next few years, so we will need quite a few different panels.

Earl Howe: My Lords, this group of amendments usefully focuses us on reconfiguration and the sustainability of NHS services. The sustainability of services will be centre stage for commissioners and providers alike. I should like to set out some key features of the Government's reforms, which I hope will reassure noble Lords that the system we have put in place will deliver sustainable NHS services. The first key feature is that local clinical commissioners will be responsible for securing continued access to healthcare that meets the needs of local communities in consultation with health and well-being boards. Any proposals for service change will be locally led by clinicians in consultation with patients and the wider community.
	The second key feature is that the continuity of services regime requires Monitor to support commissioners to secure continued access to NHS services. Monitor will do this by undertaking an ongoing assessment of risk and intervening to support recovery and to prevent failure where possible. Therefore, the onus is on commissioners and providers to address any problems with the sustainability of NHS services. Only as a last resort where commissioners and providers have failed will Monitor step in to appoint an administrator to take control of the provider in order to secure continued access to NHS services.
	The noble Lord, Lord Warner, suggested that there would be nothing between a locally led process leading to an agreed reconfiguration and Monitor triggering the failure regime. That really is not so. It may be helpful to the Committee if I explain. There are various levers available to Monitor before failure is even thought of. First, regulatory interventions are available to Monitor through the licence in order to protect patients' access to essential services where Monitor considers that a foundation trust is at risk of becoming clinically or financially unsustainable. I agree that there should be a way for the system to respond when, as the noble Lord put it, trouble is seen to be coming down the railway track.
	Where it is appropriate, Monitor would be able to direct a provider to appoint turnaround specialists that would provide additional capacity and expertise to support a provider's management in turning an organisation around. Monitor would also be able to appoint a pre-failure planning team to work with commissioners to develop plans for securing continued access to services in the unlikely event that turnaround was unsuccessful. That process may identify reasons why service reconfiguration would be needed to secure sustainability, but it would remain a commissioner-led process. I hope that I have made it clear that it is appropriate for local clinical commissioners and not Monitor to lead this process with support from the NHS Commissioning Board. The board will be able to support clinical commissioning groups by providing support and advising on the possible effects of larger changes, and Monitor will support commissioners in protecting patients' access to essential services through the licensing regime.
	The noble Lord, Lord Hunt, suggested that the board should play a leadership role. The Bill allows for that to happen in a number of ways, using commissioning guidance to set expectations on how CCGs should deal with reconfigurations that span CCG boundaries. It would also provide access to advice in the form of senates to help them develop their proposals. Ultimately, where a local authority challenges a proposal, the board will be able to direct the CCGs on their plans, so there is an interest in making sure that those plans are robust to start with.

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Earl for giving way. I understand that, but is not the problem as my noble friend said? If you look back over the past 20 to 30 years, the NHS has found reconfiguration decisions very difficult indeed. The new system potentially has weaker bodies, in the form of the clinical commissioning groups, covering smaller areas, such that taking a bold decision on matters such as closing an accident and emergency department would be very difficult. In one way or another, what is being suggested is some kind of external mechanism that essentially forces the local health economy, both commissioners and providers, to come to terms with the latest knowledge in relation to safety and quality. They would actually have to face up to the challenge.
	This happens in a way with the various inspections of the colleges and the deaneries, and we know of a number of hospitals where the viability suddenly goes because of an inspection and they are not approved for training. This has a devastating domino effect on the rest of their services. But surely the time has come for a much more proactive external review of each local health economy area. It would be of assistance to those who wish to move and modernise services because they would be able to turn to the mechanism, whatever it is, and say, "We have to change". If the Government are simply relying in this legislation on local forces, my fear is that that simply will not happen quickly enough.

Earl Howe: I understand the noble Lord's point; it is one that we have thought carefully about, as he might imagine we would. The trigger for local service reconfiguration is often a joint decision by commissioners and providers that the current configuration of services does not offer the highest quality care or that it does not meet current and modern clinical practice. It is usually a dialogue between commissioners and providers which identifies services as being, in some way, not optimal for patients, and that a reconfiguration is the most appropriate way to improve and modernise services, rather than smaller scale operational change.
	We are proposing that commissioners should engage and consult on these changes in the normal way, working closely with providers and engaging with patients, the public and local authorities in developing their proposals. However, I agree that there are clear roles for the board, and for Monitor, in ensuring that this process is given a fair wind. They have an interest in ensuring that services are of high quality and sustainable and they will wish to add value to the process.
	We talk as if all reconfigurations were long and drawn out-we all know of some that are like that-but the successful reconfigurations tend to be those that have involved more, rather than fewer, local stakeholders. That is why we are strengthening the powers provided by the Bill, so that reconfigurations can take place in a genuine spirit of local engagement and partnership.

Lord Beecham: What does the Minister mean by local consultation and local considerations? One can envisage a situation when hospitals serve just a particular locality. However, in many areas, there are trusts and hospitals serving a much wider community-a sub-regional or perhaps even a regional community-and who then is to lead the process? Who then is to take the decision? There could be several commissioning groups involved, looking at the facilities in question, rather than just the one or two in a particular town or county.

Earl Howe: The noble Lord is absolutely right. In that kind of situation the process would inevitably become more complex. I do not know whether the noble Lord noted the comments of Dr Jennifer Dixon of the Nuffield Trust when she gave evidence to the Commons committee, but she said:
	"If you look at some of the more successful attempts at reconfiguration, more involvement of local groups was necessary in order to get change. Some of the unsuccessful ones have been those where they have communicated less and involved fewer people".
	So paradoxically, she said, having more local organisations involved,
	"could have the opposite effect".
	I think that that was a very perceptive comment. We think that the Bill should strengthen and encourage these relationships, either within a local area, or within a larger one, where services are commissioned over a larger area, as very often they will be, and you will get a broader dialogue taking place. The main object for all of us is to ensure that the mechanisms for this kind of partnership-working and local engagement are in place.
	I take the point of the noble Lord, Lord Warner, about the length of time that some reconfigurations have taken in the past. We are very conscious of that. Under our plans, local authority scrutiny functions will be required to publish a timescale for when they will make a decision on whether to refer proposals for substantial service reconfiguration. We intend to change the existing regulations so that, where scrutiny functions are delegated to joint committees of two or more councils, councils could not step in and exercise those functions. This should prevent proposals which have taken time to develop and agree through a joint overview and scrutiny committee from falling apart at the end of the process by one local authority choosing to refer.
	I understand the noble Lord's concerns and will of course reflect on his proposal. However, I think that we are creating what could be an effective framework that would allow commissioners and providers to work together to reconfigure services where that is needed to protect patients' interests. To support that, the Bill sets out a commissioner-led framework. We think that it is right for patients that it should be framed in that way. With the prospect of continuing dialogue on this subject, which I think will rear its head on more than one occasion as we go through these Committee proceedings, I hope that the noble Lord will feel content for now to withdraw his amendment.

Lord Warner: My Lords, this has been a useful piece of-if I may put it this way-foreplay on this subject before we get down to real business. I want to say a couple of things to the Minister as he goes into reflective mode.
	We tried turnaround teams with individual trusts in 2005-06 in the aftermath of financial failure. The trouble was that they tried to solve the problems of a particular hospital within that hospital and not within the health economy. I listened carefully to a lot of what the Minister said. Many long-standing problem trusts cannot solve their problems. You can keep coshing them into insensibility, but they cannot solve them on their own. They need to be solved within a much wider context. I would pray in aid north London, which in my judgment has something like three district general hospitals too many for the income that is likely to be available. Those hospitals cannot be saved on their own. There is a massive reconfiguration exercise to be done in a wider health economy. I give turnaround teams three out of 10; we need something better than that.
	I wish the Minister and the Government well in trying to tackle this subject. It may be that all Governments have to go through the difficult process of learning by disaster, which is what may happen here. We are dealing with a deep cultural problem in the NHS. It believes that, somewhere along the line, a cheque will come through the post to bail it out at the local level. Unless that culture is changed dramatically, I do not believe that the Minister's well intentioned approach is likely to deliver the change that we need.
	I, too, shall reflect, but I think that we shall come back to this matter and look for something which may not be as draconian as my noble friend would be satisfied with but which moves in the same direction if we are to see the changes that the NHS needs made in the timescale that is needed. I beg leave to withdraw the amendment.
	Amendment 104 withdrawn.
	Amendments 104A and 105 not moved.
	House resumed.

House adjourned at 10.03 pm.